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Question

No 1098T and Turbo Tax says my Scholarship money requires child to file

Forum|Forum|5 years ago
March 13, 2021
4 replies
0 views

My child's College did not send a 1098T and they say that they won't because of the scholarship money. I did the math and Tuition/Fees exceeds the amount of scholarship for the year, but I don't care about arguing that point. I get to the end of the Education deduction Q&A and it says that my child needs to file taxes because it counts as income since scholarship money exceeds education expenses. But that is not true. Since I did not get a 1098T, I can't enter in Tuition/Fees to demonstrate that scholarship money does NOT exceed educational expenses. How do I enter this properly, or do I just put the numbers in the 1098T section as if I had a 1098T? Please help.

TurboTax Home & Biz Windows

Hal_Al

Employee

You've made a mistake in entering data or you don't understand the expected result.

What are your numbers?

What is your tuition and fees amount?

What is your books and computer cost?

What is the amount of the scholarship?

Is the scholarship restricted to being used for tuition?

Are you trying to claim the American Opportunity credit, on your return? If so, are you trying to claim the maximum $2500 or only amount allowed by the expenses exceeding the scholarship? You can claim the max, by having the student declare some of the scholarship as taxable.

scottiggyAuthor

Using some ballpark numbers for privacy and demonstration purposes, Tuition/Fees $13k; Scholarships $11K; Room/Board $3k; and Books/supplies/etc $2.5K. Scholarships are general (Department award, Honors College, Provost Award). I am certain that I do not qualify for a deduction/credit based on the instructions in 8863, so I am trying to confirm that my child does not need to file taxes.

When I don't have a 1098T, there is no place in TurboTax for me to put Tuition/Fees unless I summarily fill in the 1098T Box fields based on what I know, which I could do because, to the best of my knowledge, that form data is not included in my submission since I am not eligible for any educational deduction/credits. Without doing that, TurboTax provides no screen for my situation and tells me that my child needs to file taxes because scholarship/assistance exceeds educational expenses, which they clearly do not. I contend that this is an unhandled situation within TurboTax.

My analysis is that scholarship money does not exceed tuition/fees (as indicated in TurboTax) and that taxes do not need to be filed in my child's name. Would you agree?

Hal_Al

Employee

You don't qualify for a tuition credit, apparently because your income is too high (If you think it's some other reason, you probably do qualify).

Your student does not qualify for a credit, because he is your dependent. None of his scholarship is taxable because his qualifying expenses (tuition, fees, books)exceed his scholarship amount.

He does not have a 1098-T.

You should not be entering education information in TurboTax. There's nothing to claim or report.

Even if you had a 1098-T, you could ignore it, in your situation. The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return.

CindyKR

I hope to save some others a bit of stress. Check to see if the school used your student's temporary school address on the form. If so, the form may have gone to them physically, and/or it has to be looked up online using that address.

I just went to look for my student's 1098-T and realized there wasn't one on the website to download. So, I found this post to see what to do. Then, I decided to call student accounts at the college, and they quickly asked me if my address had changed. I told them it hadn't, but they pressed and asked if my child had moved. Yes, they had moved off campus, but I didn't think they would have changed their address from our permanent one. They told me that I should try using the temporary mailing address to look up the form online - and that was the issue!!!! Because the 1098-T had a new address, I had to look it up with that address.

So, I hope others might benefit from this discovery.

I asked the school if it will be okay to file my taxes with the new address not being the same on the 1098-T as our tax return filing address, and they told me that would not be an issues. I hope they are correct.

Vanessa A

Yes, they are correct. Having your child's temporary address on the 1098-T will not cause a problem when you file your return.

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CindyKR

Thank you, Vanessa! I appreciate your reassurance!

jttucker3

I have a variation:

Received 1098-T for daughter

Block 1 was $4,261 (amount we paid out of pocket)

Block 2 was 0

Block 3 was $5,500 (scholarship paid directly to the school)

Actual Tuition paid for Spring 21 and Fall 21 semesters was $9,761 (which is the sum of Block 1 and Block 3).

Turbo Tax now states my daughter needs to count the difference of Block 3 and Block 1, $1,239, as income and has to file a tax return. Doesn't make since that this is income.

Did the school error in filling out Block 1 and I need to request an amended 1098-T? Or does the Turbo Tax program have an error in this case

Hal_Al

Employee

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly your student has taxable scholarship income.

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid.

The most likely explanation is that the Spring 2021 tuition was actually included in box 1 of the 2020 1098-T.

wricd01

The vocational school required payment in 2020; but the student start attending classes in 2021. WHAT FORM CAN HE USE FOR 2021 TAXES?

JillS56

If the school tuition was paid in 2020, then any deduction would have been taken in 2020. The deduction needs to be taken in the year that it was paid. Did the vocational school provide a 1098-T?

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 repealed the tuition and fees deduction for tax years beginning after 2020. Income limitations for the lifetime learning credit were increased to help filers transition to the lifetime learning credit. Form 8863 will provide you with information on options that might be available.

wricd01

The student was issued a 1098T for 2020, and none was issued for 2021.

He received scholarship money in 2020 for his school year 2021, and this money was sent directly to the vocational school. I can't remember if the scholarship money was stated on the 2020 tax form.