1098-T box 1 plus box 5 equals total tuition

[user17709255430]

On my sons 1098-T his box 1 amount is lower than his box 5 amount but the two amounts added together are the total of his tuition for 2025. None of the scholarship funds went to room and board. It all went to tuition. But when I enter the amounts in Turbotax on my return because he is a dependent, it says we do not qualify for the education credit and it is making the difference taxable income. I believe this is incorrect but the only way around it is to not enter the amount from box 5 in Turbotax. Is this allowed? 

[Hal_Al]

It's highly unlikely that the school made a mistake like that.  You should verify that your math is correct.

That said, the 1098-T is only an 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 possibly your student has taxable scholarship income. 

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2024 expenses".

Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.

[user17709255430]

The amount in box 1 is the remaining tuition that my son paid out of pocket after the scholarship was applied. According to the school, that is the amount that is supposed to be in box 1. I feel that is the amount that should be applied to the education credit. I just feel like Turbotax is looking at it like the difference between box 1 and box 5 is scholarship money that was left over after the tuition was paid that he got to keep and that is not the case. 

[Hal_Al]

Your school did it wrong or you are describing it wrong.  The box 1 amount should be the total tuition (and fees) paid, regardless of whether it was paid by scholarship or out of pocket (or  by loans, 529 plans, parents or grandparents). 

If you are sure that you are correct, then yes the box 1 amount (actually shown on your 1098-T) is the amount to be used to claim the credit (plus the cost of any books and a computer).  You'll have to make adjustments when you enter the 1098-T.