Please clarify which type of 1098,
Education Expenses or
Mortgage Interest
Something else
At the bottom of the screen titled "Lets get the details of your 1098", click on the link "What if I have something in box 4 of my 1098" for instructions.
What if my 1098 has value in Box 4 (Refund of Overpaid Interest)?
Refund of Overpaid Interest in same Calendar Year
If overpaid interest was reimbursed in the same calendar year as paid it should be netted in Box 1 (Mortgage interest received). No action is required. Input your 1098 with the amount in Box 1.
For example, if you paid $5,000 in interest and were reimbursed $500 of that amount in the current year. Box 1 should reflect $4,500 as interest paid and nothing should be in Box 4.
Refund of Overpaid Interest in a different year
If you received a reimbursement of interest this year and in prior year you deduct the interest for a tax benefit you would reconcile the reimbursement.
Example: You overpaid $700 of interest last year and included the amount of your deductible interest on Schedule A. The next year you received the $700 back. The Bank sends you a 1098 that reflects $700 in Box 4 and nothing in Box 1. Since you deducted your income in a prior year and received a refund in a different year the $700 is treated as income in the year received. The income is reported under Miscellaneous Income:Reimbursed deductions from a prior year.
If you did not itemize or did not include the interest on your tax return the amount on 1098 Box 4 does not need to be included in your current tax return.