Scholarship and timing

Forum|Forum|5 years ago
February 11, 2021
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My daughter graduated from college May 2020. All four years she had a scholarship which covered most of her tuition. I paid all of her Spring 2020 expenses, except housing, in December 2019, and therefore they were used for last year’s return. On the 1098T Box 1 is 0, Box 5 is $8,000, and Box 4 is $70. Does she now have to record her $8,000 scholarship received in January 2020 as taxable income for 2020? What do we do about the adjustment in Box 4? She was a dependent last year but is filing her own return for 2020

Hal_Al

Employee

Q. Does she now have to record her $8,000 scholarship received in January 2020 as taxable income for 2020?

A. Yes, unless your own records show that some of it was reimbursement for expenses paid in 2019 (not including expenses that were used to claim the tuition credit).

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 deduction or possibly your student has taxable scholarship income.

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2020 expenses".