1098t loop hole

[Familyman0409]

I have nothing in line 20 (Amount from schedule 3, line 😎 

If that's the right line. this is the form 1040 correct?

[Familyman0409]

I have nothing in line 20 (Amount from schedule 3, line 8.)

If that's the right line. this is the form 1040 correct?

[Hal_Al]

Q. If that's the right line. this is the form 1040 correct?

A. Yes. 

Line 3 of schedule 3 is Education credits from Form 8863, line 19. That eventually gets to line 20 on the 1040.

On the other hand, the amount on line 29 (form 1040) comes from line 8 of form 8863.  It's unusual that both numbers don't get to the 1040.  Review form 8863. You may have answered something wrong in part III.

[Familyman0409]

Ive gone over it and resubmitted  it. Still getting the same thing. I dont wanna get rejected. 

Just to go over it all again

On the original 1098t 

Box one 7,875

Box five. 10,016

On the parents return in put in 2000 and left all other boxes empty 

and this gives me a credit of 800.  

What would I be doing wrong or answering wrong?

[Hal_Al]

"On the parents return in put in 2000 and left all other boxes empty 

and this gives me a credit of 800.'

Then there should not be $1000 on line 29. 

What's on form 8863? $2000 or $4000?   Try deleting the 1098-T and re-entering. 

Why are you doing $2000 instead of the more generous $4000?

[Familyman0409]

Its showing 2000 on the 8863 form.

I put 4000 in there and its really  no gain vs the taxale amount we will have to pay on the students income.

[Familyman0409]

On form 8863

Line 1  2,000

7. 2,000

8.  800.

9.  1200

19. 0

27. 2,000

28. 0

29.0

30. 2,000

[Familyman0409]

The most i can get on the AOC is 1,000 and that's  by entering 4,000 in box 1.

Im settling  with 800 AOC  by entering 2,000 in box 1.

[Hal_Al]

Sorry, this is actually simple.  Only 40% of the AOTC is refundable.  If you have 0 tax liability (lines 16 & 18 on form 1040), you do not get the other 60% (nothing on line 20).  So entering $2000 gets you $800 and $4000 only gets you $1000. 

This thread has gotten long, and I though we had previously established that you were eligible for  both pieces.  Apparently not. 

Entering $2000, rather than $4000, is best as your student will pay more than you get. 

[Familyman0409]

I apologize  and yes its got long. But you have gone above and beyond  i really appreciate  it also.

So putting in the 2,000 is fine  and thats why im getting the zero on the line 20? and all the other numbers  looks good?

So i should be good to go with just putting the 2000 in there now correct. 

[Hal_Al]

Q. So putting in the 2,000 is fine?

A. Yes. 

Q.  Thats why im getting the zero on the line 20?

A.  Yes. "That" being the fact that you have no calculated tax liability. 

Q. So i should be good to go with just putting the 2000 in there now correct. 

A. Correct.

[Familyman0409]

Ive got it all entered in and looking great. Thank for your help. 

I do have on ither question  about it if you dont mind. When i go on the students return and in the my info section.  Its got check boxes for "im a full time student and i can be claimed  by someone else.

When clicking the full time student  it throws a error for 8615 for. Asking for parent ssn is this correct?

If you dont click on full time student then just "i clam be claimed  by someone  epse "it doesn't  throw this error 

[Hal_Al]

Q. When clicking the full time student  it throws a error for 8615 for. Asking for parent ssn is this correct?

A. Yes.  After $14,600, the taxable scholarship is treated as unearned income.  This means the "kiddie tax" (the child's income is taxed at the parent's marginal tax rate) kicks in.  It's not a big deal in your case, 12% instead of 10%. 

Q. If you dont click on full time student then just "i clam be claimed  by someone  epse "it doesn't  throw this error.

A.  That's correct. The kiddie tax has slightly different rules than just the dependent rules, including application of  the full time student rule.  

[Familyman0409]

Thank  you so much. Youve went above and beyond.  I thank you 

Ill just do the  kiddie tax thing which that seems like the way im supposed to do it. it only knocks a dollar off. She was able  to get reciepts. So she dosent owe any  now andbl shes getting a refund.

[paulschiele77]

Our son's box 1 shows more than box 5 but it is saying that it is taxable.  Why would that be the case?