College deduction not received for spring semester of senior year

[earlla]

I am preparing my sons taxes, he claims himself on a single filer return.  He paid the spring 2025 tuition 12/27/2024 out of a college advantage account directly to the university.  Therefore, he did not get a 1099-Q in 2025.  In 2024 the university 1098-T did not check box 7 stating that tuition related to 2025.  In 2025 we did not get a 1098-T for the tuition for spring semester 2025 we only got a 1098-T for scholarship dollars that were applied to his account in January 2025.  If I use turbotax premier and fill in only the 1098-T that he received for the scholarship, he does not get the $1k college credit.  The university does not think the 1098-T is prepared incorrectly on their side.  How should this be reflected in turbotax so he gets the deduction given the documents that I have?

[Hal_Al · Accepted solution]

Q. When we enter the 2025 1098-T, that he received for the scholarship, he does not get the $1k college credit. Is that right?

A. Probably. Spring 2025 tuition paid in 2024 is only eligible for the tuition credit on your (or his) 2024 tax return, not the 2025 tax return. 

On the other hand, was the spring 2025 tuition actually allocated to the 2024 1099-Q or was it allocated to the 2025 scholarship.  If the scholarship, then you can manipulate the entries to reflect that.* 

But there are several items that aren't clear.

1. If the tuition was paid by either the 2024 1099-Q or 2025 tax free scholarship, how is he eligible for the tuition credit.

2. College usually takes 4 academic years, but 5 calendar years. This usually means the parents have already claimed the American Opportunity credit (AOC or AOTC) the maximum 4 times.  He would not be eligible for the AOC, but might be eligible for the lesser Lifetime Learning Credit (LLC), which does not have a refundable part (he must have a tax liability to offset). Getting only $1000 AOC indicates he does not have a tax liability. 

3. If he has that little income, he may not qualify to file as a non-dependent.  

4. He must be over age 23 or have provided more than half his support with his earned income to qualify for the refundable portion of the AOC. 

*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. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2024 expenses".

Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.