I'm a student who received a 1098-T with an amount on Line 5 only. My mom claimed me as a dependent on her taxes but did not report the 1098-T on her return. Should she have reported this on her return or is this only reported on my return? I'm unclear why this is reported as taxable income since it was a grant.
Q. Should my mom have reported the 1098-T on her return?
A. Only if you had qualifying educational expenses (tuition, fees, books and other course materials, including a required computer) for which she could claim an educational credit. She would not report the scholarship on her return.
Q. Or is the 1098-T only reported on my return?
A. The 1098-T can be reported on either or both tax returns, depending on the details.
Q. I'm unclear why this is reported as taxable income since it was a grant?
A. Scholarships and grants that exceed qualified educational expenses, is treated as income. So, if box 5 has an amount and box 1 is blank, then the entire box 5 amount is taxable, unless you enter other qualified expenses. Room & board are not qualified expenses.
Why is there nothing in box 1 of your 1098-T? Did the grant pay for tuition and the school just failed to enter it in box 1 (that is unusual)? Do you have any qualified expenses to enter?
There's a loop hole available for the parent to claim the credit, even if you are on scholarship.
It appears there is no tuition payments received in 2023, however there was scholarship funds in Box 5. Report this Form 1098-T on your tax return to see if you need to report income from scholarships because it was not used for tuition, books or supplies for classes.
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