1098-t question

[Rm124]

I paid fall semester of college in July 2023 and was suppose to pay for the 2024 spring semester in December 2023. Because the college was changing their payment process I was only able to pay in Feb. 2024.  My 1098-t shows my partial tuition I payed in 2023 but shows the full scholarship amount I received. My scholarship is for the full year of 2023 but because I was only able to pay half in 2023 shouldn't it show only half the scholarship? Shouldn't the other half show in my 2024 1098-t with the tuition I paid for the spring semester in Feb. 2024? Because  the 1098-t shows my full scholarship and partial tuition it lowered my Massachusetts education discount. Next year I will start Grad. School so I am not sure if I can summit my 1098-t form.

[MarilynG1]

This is not an unusual situation, so the IRS is aware of it, and TurboTax has a way to work around it. 

When you enter your 1098-T in TurboTax,  under the Box 1 entry, check the link that says 'this is not the amount I paid to the school' and enter the full tuition amount.

OR, as you proceed through the education interview, you'll get a screen asking 'Did Aid Include Amounts not Awarded for 2023 Year?'.  You can say YES here, and enter the correct Aid Amount for 2023 (half of what is on 1098-T).

Either method will adjust your Tuition/Financial Aid amounts to match for the 2023 year.

[Hal_Al]

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 2023 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.

[Rm124]

Doesn’t it matter that I paid it in 2024 not in 2023?

[Hal_Al]

Q. My scholarship is for the full year of 2023 but because I was only able to pay half in 2023 shouldn't it show only half the scholarship? 

A. Yes, it should. But it doesn't. So, you have to adjust.

Q. Doesn’t it matter that I paid it in 2024 not in 2023?

A. Yes. So, it would not be an appropriate adjustment to claim that payment as having been made in 2023. 

I think the appropriate adjustment is to adjust the scholarship amount for "amounts not awarded for 2023 expenses".  Next year, you'll have to make the opposite adjustment.  The TurboTax asks for scholarships not shown on the 1098-T.