If she meets the filing requirements with the W-2, she must file. See below images for filing requirements
Did you pay any qualified education expenses out of pocket? If you did not, you do not report the Form 1098-T. How is the Form 1098-T reported? If you receive a scholarship used for room and board or stipend, you need to report it. Did the school report it anywhere else if not 1098-T? My concern is if the school did report those income amounts, like stipend, room and board on any tax document, IRS will receive a copy and they will expect you to report it on your taxes. You might want to contact your school to verify.
I've seen others say that because an RA is a full time student living on campus and working as an RA that room/board/meal plan is not taxable. W-2 only shows her federal work study income and 1098-T only shows actual tuition/fees and actual scholarships. Her earned income is not enough for her to file a tax return. So according to you, you are saying she should report what they charge for room/board/meal plan? As others have stated this is confusing.
RA's are not required to claim room and board as income. It is considered a benefit provided for the convenience of the employer (the school). Your daughter's job as an RA requires her to live in the dorm. Similarly, meals are provided onsite as convenience for the school. If they provided her a housing and/or meal allowance it would be taxable. But providing it on campus is not.
Yes, for a full time student living on campus and working as an RA that room/board/meal plan is not taxable. The fact that it was not shown on a W-2,1099 or 1098-T is just further proof that it is not taxable. Do not report it as income.
Okay I called the school to verify what is reported on the 1098-T. They did include RA room/board/meal plan stipend into box 5 (scholarships/grants) money but only comes out to less than $7k. She also has a $1500 housing grant from Spring semester 2019 that I forgot about.
So now I'm very confused as to how to enter this and if my daughter will need to file taxes. She made less than $4k through federal work study job for the whole year.
Report only the income she has documentation for (W-2 & 1098-T). Forget the$1500 housing grant from Spring semester (it's either alteady included on the 1098-T or is not taxable (or was reported on the 2018 1098-T).
Her taxable income appears to be less than $4000 + less than $7000 = less than the $12,200 filiing threshold. She does not need to file a tax return, unless there was income tax withholding (box 2 of the W-2) to claim a refund of.
That's the simple aswer. Here comes the fun part:
There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.
Using an example: Student has $17,000 in box 5 of the 1098-T and $10,000 in box 1. At first glance he/she has $7000 of taxable income and nobody can claim the American opportunity credit. But if she reports $11,000 as income on her return, the parents can claim $4000 of qualified expenses on their return.
Thanks Box 1 is higher than box 5 by $12k and we planned to claim her as a dependent as we pay all her bills and she still technically lives with us.
If box 1 is higher than box 5 by $12k, none of the $7000 RA room/board/meal plan stipend in box 5 is taxable. You are allowed to apply that $7000 against the $12,000 in box 1, making the $7000 tax free scholarhip, not wages.
but won't the IRS catch that a w-2 was issued and not reflected on the students tax return if they do a 'match'?
As I understood the post, student has $4000of income on a W-2 and $7000 in box 5 of the 1098-T (additional detail obtained, by the parent, by making an inquiry to the school). He will be reporting the $4000, but not the $7000.
Can you help me with this question? Thanks so much
Super Hal_Al- Can you help me figure out taxable scholarship amount and how you got that number?
1098-T- Box 1- $4521 ($3728 plus $793 in fees) Box 5 $14167
Required Books $156.35
1099-Q Gross Distribution $3728 Qualified education program, 529- prepaid tuition
Dorms- Room and Board- $6615.41
Thanks so much -
My question is my child is a resident of IN, goes to school in MI. Worked for college in MI during summer. W2 shows Box 1 $6400, Box 3&5 $4900. Why the difference? Box is $445. She paid no MI or IN taxes. Does she have to file MI and IN state taxes? 1099Q Box is $6700. 1098T Box 5 is $22636. Does this mean she has to file a tax return because $6400+$6700=$13,100>$12,200?
@abcdefghijk - None of the 1099-Q is taxable, since the room and board alone exceed the distribution amount.
I assume you want to use $4000 of expenses to claim the American Opportunity Credit. That leaves $677 (4521 + 156 - 4000 = 677) of qualified expenses to be covered by scholarship. So, the taxable amount of SCH is $13,490 (14167- 677 = 13490).
a couple of questions....
1) what is the number in BOX 1 of Form 1098-T?
2) is she a dependent for tax purposes on anyone's tax return (probably yours?)
3) what are her college expenses (please list them out; tuition, room and board, required books, non-required books, etc.)
4) what is in BOX 1 and BOX 2 of form 1099-Q?
5) on the 1099-Q, whose social security number is on it - yours or hers?
also, her standard deduction is not necessarily 12,200 if she is a dependent. Some of here income is earned (6400) but the rest appears to be unearned.
For 2019, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,100 or the sum of $350 and the individual's earned income (not to exceed the regular standard deduction amount).
@ccchlfields Student wages at tax exempt colleges are usually exempt from FICA tax. For whatever reason, her college has determined that $4900 of her $6400 was not exempt. You'll have to ask them why. It probably has something to do with where she worked and on what.
MI and IN have a recprocal agreement on wages. She does not need to file a MI return. "A general rule of thumb is to file Indiana state taxes if your income is $1,000 or more. When it doubt, it is best to file". https://www.in.gov/dor/4731.htm
Box is $445. What Box?
1099Q Box is $6700. What's in boxes 1, 2 and 3 of the 1099-Q? Whose name and SS# are on the 1099-Q? It may be you that files it, not her.
1098T Box 5 is $22636. What's in box 1? How much did she pay for room & board? Books?
Q. Does this mean she has to file a tax return because $6400+$6700=$13,100>$12,200?
A. No. But with the rest of the numbers, she may still need to file, but unlikely. If the $445 is box 2 of the W-2, she will want to file to get that refunded. In general, the difference between box 5 and box 1, on the 1098-T, is usually taxable (the amount that box 5 exceeds box 1)
for clarity @Hal_Al's statement that "In general, the difference between box 1 and box 5, on the 1098-T, is usually taxable."
In general, when Box 5 exceeds Box 1, on the 1098-T, is usually taxable......(it's not taxable the other way around) 😉
Box 2 on W2 is $445.
1099Q Box 1 $17560 Box 2 $6710, Box 3 $10800 Child's name and SSN
1098T Box 1 $35200
2) is she a dependent for tax purposes on anyone's tax return (probably yours?)
3) what are her college expenses (please list them out; tuition, room and board, required books, non-required books, etc.)
one more - did the payments from the 529 go directly to the college or to your daughter?
answers to these questions will impact the response you get..... they make a difference.
2- yes she is a dependent-
3-
what are her college expenses (please list them out; tuition, room and board, required books, non-required books, etc.)
tuition $3728,
fees- $793 (#3728 plus $793= 4521 which is box 1)
room and board- $6740.41
Required books- $156.35
Non required books- $0
payments from 529 went directly to the college-
one more - did the payments from the 529 go directly to the college or to your daughter?
1098-T Box 1 $4521 Box 5- $14176
1099-Q Box 1 $3728 Box 2 $1944.53 box 3 $1783.47
thank you for your help
My 19 yr old child has permanent residence in IN. She goes to college and worked for college in MI. W2 did not take out state taxes in either state. Where does she file state taxes IN or MI?
Your child has a tax home in IN, but has income in MI. She'll need to file a non-resident tax return in MI.
well, this got quite confusing because @abcdefghijk answered questions that were intended for @ccchlfields
@abcdefghijk - please do not answer anymore; I think you got your answer , right?
@ccchlfields..... @Hal_Al answered your question about the state taxes ... see below
MI and IN have a recprocal agreement on wages. She does not need to file a MI return. "A general rule of thumb is to file Indiana state taxes if your income is $1,000 or more. When it doubt, it is best to file". https://www.in.gov/dor/4731.htm
then you asked,
1099Q Box is $6700. 1098T Box 5 is $22636. Does this mean she has to file a tax return because $6400+$6700=$13,100>$12,200?
and i asked a number of questions:
1) what is the number in BOX 1 of Form 1098-T? $37200 (box 5 is $22, 636)
2) is she a dependent for tax purposes on anyone's tax return (probably yours?)
3) what are her college expenses (please list them out; tuition, room and board, required books, non-required books, etc.)
4) what is in BOX 1 and BOX 2 of form 1099-Q? Box 1 $17560 Box 2 $6710,
5) on the 1099-Q, whose social security number is on it - yours or hers? her's
I am going to assume that the answer to #2 is that she is your dependent
since Box 1 exceeds Box 5 of the 1098-T, it has no tax impact. the difference is $14,564
The 1099Q is $17560 less the $14564 leaves $2,966. As long as there are an additional $2966 in expenses that were NOT in Box 1 of form 1098-T then there is no tax impact. And presumably there were additional expenses because the payment went directly to the college to pay the outstanding bill.
the answer is she had to file a tax return IN ORDER TO GET BACK THE $445 of federal tax withholdings - that is the only reason. (her standard deduction is the $6400 + 350).
@Hal_Al - can you please weigh in as you are more qualified than me on this topic?
@ccchlfields @NCperson Room and board are qualifying expenses for a 529 distribution. Assuming she has at least $2966 in room and board (even if she lives at home), none of her scholarship or 1099-Q is taxable, as both are covered by enough qualified expenses.
She only needs to file a return to get her $445 withholding back. She should not enter either the 1098-T or 1099-Q, in Turbotax. Both are only informational documents and do not have to be reported. Entering them is only going to get confusing. We already know they are not taxable.