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mklem9
Level 2

1098-T, calendar year vs. academic year, taxable income

The difference between box 6 and box 1 on Form 1098-T is being included on Turbotax as taxable income. I did a one-year degree during the 2019–2020 academic year. Of roughly $26,000 total tuition, about $22,000 of the $26,000 total tuition was accounted for in box 1 on the 2019 1098-T, and only $4,000 of that $26,000 was on the 2020 1098-T. But the scholarship was evenly divided, about $6,000 in box 5 of both 2019 and 2020 1098-T. So it ends up looking like I made about $2,000 in income for 2020 and like I paid about $16,000 for 2019. But really I paid about $7,000 for 2019 and $7,000 for 2020. Am I basically paying this year for benefits I didn't deserve last year? Or do my forms need to be corrected? I was not expecting to pay taxes on my scholarship since the scholarship only covered about half of tuition.

1 Best answer

Accepted Solutions
Hal_Al
Level 15

1098-T, calendar year vs. academic year, taxable income

 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 deduction 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 2020 expenses".

 

"Or do my forms need to be corrected?"

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.

View solution in original post

2 Replies
Hal_Al
Level 15

1098-T, calendar year vs. academic year, taxable income

 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 deduction 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 2020 expenses".

 

"Or do my forms need to be corrected?"

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.

View solution in original post

mklem9
Level 2

1098-T, calendar year vs. academic year, taxable income

Incredibly helpful, thank you!

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