Student 1098-T Dropped Quarter, Received Surplus Aid But Repaid to University

Forum|Forum|5 years ago
January 20, 2021
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Last Spring I received let's say 4000 dollars surplus in scholarship money but ended up dropping the quarter. As a result, I repaid 4000 dollars worth of scholarship to the University. Now looking at my 1098-T it shows that I have received 4000 dollars worth of scholarship money at this time. Am I on the hook for the taxes even though I repaid it to the University and didn't keep the amount as I had dropped all my courses for the quarter which in turn required me to pay them back? How does this situation work out tax wise?

Hal_Al

Employee

Q. Am I on the hook for the taxes ?

A. No.

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. If you're not claiming anything, just don't enter the 1098-T in TurboTax.