1098T amounts not matching?

[sarahcbosman]

My husbands scholarship covers all of his tuition but nothing else. However our 1098T reflects that Box 5 (the scholarship amount) is more than Box 1 (tuition and fees for the year). When I review online I get conflicting information. Everything states that if box 5 is greater than box one its taxable. However, it all went to tuition and fees (not transportation or rent) we never saw any of the money personally. If you look at my husbands school account it shows that the money was paid directly to the institution for tuition and fees. Do I have to report this "extra" income from box 5, even though it was used for eligible expenses? I believe box 1 and box 5 don't match because of the billing calendar for the university verse the tax year Jan-Dec. Does anyone have any advise?

[KrisD · Accepted solution]

When schools reported Box 2 (What was billed) rather than Box 1 (What was paid) the scenario you described happened often. Now a school is required to report Box 1 (What was paid) so if the scholarship posted in 2018, it should be in Box 5 AND Box 1. 

I do believe that some schools are not reporting this properly since it is a change in reporting methods for some of them. 

You can use your student account statement and add payments that posted to the school if they are not properly posted in Box 1. Be sure you keep a copy of the account activity to prove the payments were made in 2018 with your tax file. 

In TurboTax, enter the 1098-T and click the blue "What if this is not what I paid?" link below Box 1 on the 1098-T screen. When the next screen opens, you may need to scroll down just a bit to enter the amount that was paid to the school. 

Please see screenshots below