1098-T Scholarship amounts more than payments received?

[mjcn2000]

Box 5 on the 1098 says I earned $17,901.00, and the payments received in box 1 is $15,156.69. Yet I had to use loans to pay off the difference? When I've tried researching, people say its because room and board doesn't count as a qualified expense, but I didn't have that either, I have my own apartment I pay for out of pocket. I'm so confused? I did receive refunds each quarter, but that was after I accepted a loan, so I assumed that's what the difference was from.

[NCperson]

@mjcn2000 unless there is a timing difference, there is some clarification in your comments required. 

Box 1 are the Qualified Education Expenses (QEE) that were charged to you by the school,  Generally this is tuition and books.  The school has already figured this out to adhere to the IRS guidelines on what constitutes QEE.   This is what was charged to your account; how you paid for it is not important. 

You can add to this number any other QEE that was not charged to you by the school.  For example, any books required for class that were purchased from Amazon or similar stores can be added to QEE. 

Box 5 are the scholarships that were posted to your acccount.

Loan proceeds are neither QEE or scholarships, so that doesn't matter. 

But the fact that you received money back from the school is consistent with scholarships being higher than QEE. 

The IRS view is that ALL scholarship money is taxable income to the student.  However, that income can be reduced dollar-for-dollar by the QEE.  In this instance you have around $2800 to report as income.  Just post the 1098-T into turbo tax as it is provided to you and add in any additional QEE you may have, which would reduce the remaining $2800. if you total income is less than $15,750, it won't matter as you pay no tax in any event. 

Are you parents claiming you and eligible for AOTC, there is a work around that can get them the $2500 tax credit.  Are you eligible for AOTC?  if so, the workaround may get you up to $2500.   

[Hal_Al · Accepted solution]

Scholarships that pay for qualified educational expenses (QEE) (tuition, fees, books and other course materials) is tax free.  Scholarship amounts that exceed QEE is taxable income, on the student’s tax return. 

If box 5 of the 1098-T exceeds box 1, TurboTax (TT) will treat the difference as taxable income, unless you enter additional QEE at books and other expenses. Room & board or off campus living expenses and transportation are not QEE. Your student loans are irrelevant to the calculation.

 Here's a post on the five main points on the  1098-T:

https://ttlc.intuit.com/community/college-education/discussion/re-what-do-i-do-with-form-1098t/01/37...