Taxable Scholarship - No W-2 or 1099 Issued

Forum|Forum|5 years ago
April 17, 2021
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My son received a $1,000 scholarship that was used for incidental expenses --- per IRS Topic No 421 it is taxable. The scholarship was deposited directly into his checking account. When he did not receive a 1099 we contacted the financial institution that awarded the scholarship and was told they do not provide 1099 forms. We want to report it as income, but don't know how to do so. IRS website says to enter SCH in the space to the left of "wages, salaries" tips" line. We tried adding a W-2 in Turbo Tax, but it does not allow us to enter the SCH in box 1 -- only accepts numbers. Any guidance would be greatly appreciated.

Scholarships

Best answer by Hal_Al

Even though you entered the 1098-T on your return, it can also be entered on the student's tax return. Or for simplicity, say he didn't get one. Then answer yes to the 1098-T exception question. That will get you the screen to enter other scholarship amount.

It is not optional which return taxable scholarship goes on. It can only go on the student's return

Hal_Al

Employee

After entering the 1098-T from the school, you will be asked if you have any other scholarships not included on the 1098-T or any other tax document (1099, W-2 ). Enter the scholarship there. Then you will be asked how much of the scholarship was used for room and board “or other expenses”. Enter the amount you want to be taxable there.

AColwartAuthor

We reported the 1098-T, along with the 1099-Q's (qualified 529 withdrawals), on our taxes (parents), but really wanted to report the taxable scholarship on our son's tax return --- so it would be taxed at a lower rate.