1098-T

[FM20]

Hi,
I’m a graduate student whose tuition is paid directly by the school—I don’t receive the funds in my bank account, and I don’t personally pay the tuition. I receive a stipend as a full-time student, and my program is covered by the school, typically through TA or research assistant responsibilities.

Do I still need to report the 1098-T form when filing my taxes?

Thank you!

[Hal_Al]

Q. Do I still need to report the 1098-T form when filing my taxes?

A. No. 

 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. 

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. Room & board are not QEE.

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.

If your stipend is not included in box 5, it is entered separately. In the 1098-T interview, one of the follow-up questions will be do you have any scholarships not shown on the 1098-T. Enter the additional scholarship/stipend there.  When asked if any was used for room and board, answer yes. Then enter the amount you want to be taxable (usually all of it), in the pop up box. R&B are not "qualified educational  expenses".  So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.  This will put it on line 8r of Schedule 1 (this line was added in 2022).

[AmyC]

It depends. Are your parents claiming you or are you claiming yourself?

Parents claiming - determine how much tuition they are using and what you need to claim.

Parents not claiming -  

• If your box 5/ stipends equals or less than box 1. No need to report unless you are filing for the education credit.
• If box 5/ stipends  greater than box 1, you have income that needs to be accounted for or taxed. You may have to add your stipend to box 5 to account for it.

See What You Need to Know about AOTC and LLC to determine if you qualify for an education credit. Next, check to see if your stipend is restricted to tuition or can be used for room and board. If it can, you can move numbers around to get the Lifetime Learning Credit.  For example:

• Box 1 $25k and box 5 is $40k.
• You need $10k for tuition, this leaves $15k available to be covered by scholarships.
• $40k scholarships used $15k for tuition, then remainder, $25k went to room and board.

Check form 8863 for education credits. Adjust numbers for room and board to maximize your refund. This is allowed. The IRS has a great brochure that explains how scholarships and tax credits interact.

[FM20]

Hi,

I am filling my taxes. If I do need to report the 1098-T, I’m a bit confused about Box 1 and Box 5. I’m filing my taxes through TurboTax, and I read that if Box 5 exceeds Box 1, the difference may need to be reported as taxable income.

My question is about how to handle this in TurboTax. It asks me two things:

1. “This is not what (me) paid to this school.” I’m not sure whether I should check this box, since I didn’t pay out of pocket—everything is managed by the university, and I only receive a payslip.

2. When I check that box, it then asks me to “Enter the full amount of tuition paid to Georgetown University. Include all amounts paid by me, someone else, scholarships, fellowships, and student loans.” I’m not sure if this is the right step or what amount I should enter there.

I’d really appreciate your help in clarifying this!

Thank you. 

[Hal_Al]

Q. “This is not what (me) paid to this school.” I’m not sure whether I should check this box, since I didn’t pay out of pocket—everything is managed by the university, and I only receive a payslip.

A. Do NOT check that box.  

Q. When I check that box, it then asks me to “Enter the full amount of tuition paid to Georgetown University. Include all amounts paid by me, someone else, scholarships, fellowships, and student loans.” I’m not sure if this is the right step or what amount I should enter there.

A. Do not change what's there.