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February 10, 2025
Question

scholarship money how to claim

  • February 10, 2025
  • 1 reply
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    Hal_Al
    Employee
    February 10, 2025

    Simple answer: you enter your 1098-T and follow the  TurboTax (TT) interview.  After entering the 1098-T, TT will ask if you have any additional scholarships, not included on the 1098-T. 

     

    What are you trying to do? Are you the parent of a student or the student?

     

    Scholarships that pay for qualified educational expenses (QEE - tuition, fees, books and other course materials) is tax free.  Scholarship amounts that exceed QEE is taxable income, on the student’s tax return, including scholarships that cover room & board. 

    If box 5 of the 1098-T exceeds box 1, TurboTax (TT) will treat the difference as taxable income, unless you enter additional QEE at books and other expenses.

    If you are entering the 1098-T, on the parent's  return, TT will advise  you that your student has taxable scholarship income.  It will not (and should not) enter the taxable scholarship on your tax return.

     

    There is a tax “loop hole” available to claim an education credit, for the parents of students on scholarship.