1098-T

[eyefixin22]

Does my daughter need to amend her 2019 taxes if she didn't claim the 1098-T? We do claim her as our dependent on our taxes.

[Bsch4477]

You are the ones who can claim any education credit. But if scholarships were greater than qualified expenses the difference would be income to her if she earned enough to require her to file a return. 

[Hal_Al]

If you did not claim the education credit, on your return, for 2019, you may need to file an amended return to claim it.

There's even a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.