I'm glad you mentioned that. I was just going to research that path. Since this was graduate school, can I deduct a portion of my room & board? If so, how do I calculate what is allowable?
Does the fact that OR is taxing me on the income portion of the QTP and NOT giving a credit seem correct to you? Maybe this goes away if I claim the room & board!
You can look at pub 970 page 40 for allowable additional expenses and room and board.
Enter Form 1099-Q, then Form 1098-T in the Education Section under deductions & Credits
Continue through the interview
the program will ask about additional expenses including Room and Board.
According to IRS Pub 970 page 40
"Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below). The expense for room and board qualifies only to the extent that it isn't more than the greater of the following two amounts.
a. The allowance for room and board, as determined by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.
b. The actual amount charged if the student is residing in housing owned or operated by the school.
You may need to contact the eligible educational institution for qualified room and board costs."
"Does the fact that OR is taxing me on the income portion of the QTP and NOT giving a credit seem correct to you? Maybe this goes away if I claim the room & board! "
OR? is that Oregon?
How claiming taxable distributions affects the state depends on the state and it's true that you might owe state tax on the distribution.
Yes, that will change if you report room and board.
The lifetime learning credit is applied after the federal Adjusted Gross Income, and Oregon starts with federal Adjusted Gross income, so you are correct, that credit will not be reflected in the income transferred to the state return.
