Scholarships/Grants

Forum|Forum|3 years ago
April 7, 2023
2 replies
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Why is TurboTax including my scholarship/grant money (in box #5 of my 1098-T) as income? I was in school to get my Bachelors degree.

TurboTax Free Edition Online

DoninGA

Employee

See this TurboTax support FAQ for why scholarships can be taxable income - https://ttlc.intuit.com/turbotax-support/en-us/help-article/education-tax-credits-deductions/scholarship-taxable/L1m7eav8C_US_en_US?uid=lg5u2gyn

Bradmc25Author

The funds were not used for room and board, travel, only a few books. The majority was tuition toward the degree. TurboTax is counting the entire amount as income..

Hal_Al

Employee

TurboTax (TT) will treat scholarship as income when it sees that box 5 of the 1098-T exceeds box 1. It will treat the difference as taxable income. If you enter book expenses, the taxable amount will be reduced.

If you indicated that you are being claimed as a dependent, TT may assume that the person claiming you used some of the tuition to claim the credit. Go through the entire education interview until you reach a screen titled "Your Education Expenses Summary". Click edit next to the student's name. That should take you to a screen “Here’s your Education Summary”. Click edit next to “Education Information”. When you get to the screen titled “Amount Used to Calculate Education Credit”, verify the amount you want to use or change it (to 0 if nobody is claiming the credit).