1098-T Question

[amcaliworker]

Hello! I would really appreciate some help. I am going to simplify the numbers here to make the situation easier to understand. Box 1 says $4500 and box 5 says $7000. My issue is that I received a $3000 emergency housing assistance grant from the school and they included this in box 5 (I was expecting it to say $4000 because I was advised that the IRS does not consider emergency grants taxable). I would like to avoid paying tax on the grant or the difference between line 5 & 1 because technically I still paid $500 in tuition + another $500 for books.

I am filing my taxes using TurboTax and I’m not sure how I should complete the education expenses section. Could someone please let me know what numbers I need to include and where?

Thank you!

[Hal_Al]

You'll probably have to ask the school why they classified your $3000 as room& board (lodging) scholarship rather than the emergency housing assistance grant you think it should be,

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. 

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.

"

[amcaliworker]

Hi! I did ask the school and they said all disbursements, taxable or not, are recorded on the 1098-T. Would you recommend entering $4500 for box 1 then $4000 for box 5 (even though box 5 on the 1098-T says $7000)? This is what i’m thinking, but not 100% sure. Would this be a red flag? I don’t have an issue reporting the $3000 grant, but definitely do not want to get taxed on it. I don’t qualify for the AOTC. What’s the best way to enter this?

[Hal_Al]

 Q. Would you recommend entering $4500 for box 1 then $4000 for box 5 (even though box 5 on the 1098-T says $7000)?

A. Yes, if you're sure it's non taxable emergency housing assistance grant

Q.  Would this be a red flag?

A. No. There's has been no reporting, in this forum, of the IRS trying to match returns to 1098-Ts (other than people claiming the tuition credit actually getting one). 

Q. I don’t have an issue reporting the $3000 grant, but definitely do not want to get taxed on it?

A. There's no way to that.

Why don't you qualify for the AOTC? You may qualify for the Lifetime Learning Credit (LLC), which is not as generous.   Do you have a tax liability?  There is a loop hole for students (or their parents) to claim a tuition credit even if they're on scholarship.