My 1098-T is listed on 2 returns. How do I fix this?

[ezshopr]

My parents paid for my college and they are claiming me as a dependent. However, I have to file a tax return for unearned income.

My parents add the 1098-T to their return which lists my scholarship that was applied to the tuition.  My parents don't actually qualify for a tax credit as their income was above the cut off allowed.

When I fill out my return, TurboTax asks me if I am a student and I say yes. I also said I was a dependent and being claimed by someone else. But TurboTax still wants me to enter the 1098-T details. 

Now when I look at my return and my parents, we see a 1098-T listed on both returns (at least it is listed in the documents - not sure what actually gets sent to when I efile.)  

What do I do? Do I manually delete the 1098-t in my return and leave it only in my parents return?  Do I leave it in both returns since I can't actually get a credit since I am a dependent and my parents did not qualify for a credit due to income? Or do I do something else?

Thank you

[Hal_Al]

The 1098-T is only any 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. 

Since your parents can't claim a credit, they did not need to enter it.  They do not need to delete it if they didn't claim anything. TurboTax (TT) would have completed a worksheet showing they are not eligible. If they already file, they do not need to amend.

The same is true for you. If box 5 is smaller than box 1, you do not have taxable scholarship. And as a dependent, you cannot claim a tuition credit**.  So, you don't need to enter it either. So, you should delete it. Or you can leave it in, as long as you didn't claim anything.

**Technically there is a provision that allows you to claim a tuition credit, from a practical matter it seldom works out.  A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit if he/she supports himself by working . She cannot be supporting herself on student loans & grants and 529 plans and parental support. 

 If the student actually has a tax liability she can claim a non-refundable credit but then the parent must forgo claiming the student's dependency and the student still can’t claim herself.

[Hal_Al]

@ezshopr  @TurboTaxPhyllisG

[PhyllisG]

Thank you, Hal, for the additional follow-up.

[PhyllisG]

If you indicate on your return that someone else can claim you on their return, then the Form 1098-T is reported by the parents because they are considered to have paid the dependent's education expenses.

You will need to delete the Form 1098-T from your return.