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February 2, 2021
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Why don't my 1098 T qualify for a credit?

  • February 2, 2021
  • 1 reply
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It said based on the information I've entered, I can not claim an education tax break. I entered everything from my 1098 T
Best answer by Hal_Al

Box 1 - 1,476.49 

Box 5 - 2,243.00

I've spent $800 on books and laptop 


You do not qualify for a tuition credit, because almost all expenses were covered by  tax free scholarships. Technically you had $34 of net qualifying expenses (1477 + 800 - 2243 = 34), which should have gotten you a $14 credit, so you still musta entered something wrong.

 

What about your age?  Are you under 24? What about your dependent status; why do  you think you can not be a dependent?

 

You are only allowed to claim the  very generous  (up to $2500, $1000 refundable) American Opportunity Credit (AOC) a maximum of 4 times in your undergraduate  career. You may not want to waste one of those times on a $14 credit. 

 

There is actually a loop hole available to claim the credit, when you are on scholarship.   It takes a work around in TT. 

The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.

 

 

1 reply

February 2, 2021

If you did not pay any qualified education expenses out of pocket like tuition and books, you may not qualify.  How is your Form 1098-T reported?  The reason why you do not qualify could vary.  It could be you did not pay any tuition expenses out of pocket, or you have financial aid that covers all the tuition or you made too much of money.  To learn more about the eligibility, click the following links: 

 

Credits

 

Deduction

 

Tax Benefits

 

if this does not resolve your issues, please write back with more details and clarification.

February 2, 2021

I did not pay any expenses out of pocket besides my books and other supplies like (notebooks,laptop) & I entered the amount I spent on those items 

February 2, 2021

Check here: 

 

You cannot claim an education credit when:

  • Someone else, such as your parents, list you as a dependent on their tax return
  • Your filing status is married filing separately
  • You already claimed or deducted another higher education benefit using the same student or same expenses (see Education Benefits: No Double Benefits Allowed for more information)
  • You (or your spouse) were a non-resident alien for any part of the year and did not choose to be treated as a resident alien for tax purposes (find more information in Publication 519, U.S. Tax Guide for Aliens)