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hraezer
New Member

How did form 1098-T remove my refund?

I graduated in May of 2015 and began working full time in August. I received my 2015 1098-T, box 1 and 2 were blank, with just my scholarship in Box 5. Also, box 8 is checked. All of my scholarship went towards tuition. Before entering the form, I was to receiving a $900 return. When I then added the 1098-T it took my refund down to zero. Am I putting it in wrong? Why would it take away my federal refund? Is there a way to get the original refund?

1 Best answer

Accepted Solutions
ValerieE
Level 4

How did form 1098-T remove my refund?

Scholarships and grants can be considered taxable income if they were not used for qualified education expenses.  When you entered the 1098-T with scholarships but no tuition TurboTax will treat the scholarship as taxable income.  After you have entered the 1098-T you will have the opportunity to enter your education expenses.  Once these expenses are more than the scholarship amount your refund should return to normal. 

You mentioned that the 1098-T did not report tuition but you did use it to pay tuition.  If the tuition was paid in 2015 then you can enter it in TurboTax.  To do this once you get back to your Education Summary page indicate that you want to Add New School.  You can use the same name, EIN, address, etc for this school as you did for your previous entry for the 1098-T.  When asked if your received a 1098-T say "no".  You will then be able to enter tuition not reported on a 1098-T for the school. 

Non-qualified education expenses

If you indicated in the 1098-T interview that any of the scholarship or grant money was used to pay for Room & Board, the amount you indicated will be considered income even if your eligible education expenses are more than your scholarship/grant received.  Unless your scholarship/grant was specifically earmarked for room and board or you want them to be included in your income, you should say "no" to the Room & Board question.

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2 Replies
ValerieE
Level 4

How did form 1098-T remove my refund?

Scholarships and grants can be considered taxable income if they were not used for qualified education expenses.  When you entered the 1098-T with scholarships but no tuition TurboTax will treat the scholarship as taxable income.  After you have entered the 1098-T you will have the opportunity to enter your education expenses.  Once these expenses are more than the scholarship amount your refund should return to normal. 

You mentioned that the 1098-T did not report tuition but you did use it to pay tuition.  If the tuition was paid in 2015 then you can enter it in TurboTax.  To do this once you get back to your Education Summary page indicate that you want to Add New School.  You can use the same name, EIN, address, etc for this school as you did for your previous entry for the 1098-T.  When asked if your received a 1098-T say "no".  You will then be able to enter tuition not reported on a 1098-T for the school. 

Non-qualified education expenses

If you indicated in the 1098-T interview that any of the scholarship or grant money was used to pay for Room & Board, the amount you indicated will be considered income even if your eligible education expenses are more than your scholarship/grant received.  Unless your scholarship/grant was specifically earmarked for room and board or you want them to be included in your income, you should say "no" to the Room & Board question.

lowrider993
New Member

How did form 1098-T remove my refund?

but then wouldn't that count as lying on your tax return?
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