School added tribal scholarship to box 5 in 1098-T. Should I subtract it since it’s non-taxable?

Forum|Forum|4 years ago
February 12, 2022
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Tribal scholarships are non-taxable and I know shouldn’t be added in as income but I’m not sure what to do if it’s being added to the 1098-T box 5 that I’m reporting.

TurboTax Self Employed Online

Hal_Al

Employee

See: https://www.irs.gov/government-entities/tuition-and-other-educational-benefits-provided-by-tribes-form-1098-t#:~:text=The%20%243%2C000%20tribal%20scholarship%20as,it%20with%20your%20tax%20records.

Which says, in part:

"Note that nontaxable funds (tribal scholarships) used to pay educational expenses cannot be used to compute any allowable education credit"

I take that to mean that the tribal scholarship should be included in box 5, of the 1098-T, so that it can be applied to the tuition in box 1. If the amount in Box 5 exceeds Box1, then you should "back out" the excess.