Do I include room and board fees in the full tuition amount for the 1098-T form?

[KrisD]

No, room and board is not reported on 1098-T and is not an eligible education expense for the education credits; HOWEVER, if you received certain unrestricted tax-free assistance, such as a scholarship or distributions from a college savings account, you could apply those tax-free funds to room and board, therefor freeing up expenses to be applied to a credit. 

You will report the expense of room and board on a different screen, not on the 1098-T.

[Tucson Joe]

@KrisD Do you know which screen is used to enter this information in TurboTax? I couldn't find it when I filed my 2018 return, so I believe I ended up paying tax (plus possibly a 10 percent penalty) on money I withdrew from my child's 529 account to pay for her college dorm. I don't want to make that mistake again. I couldn't find anyplace in TurboTax to enter room and board expenses. 

[Carl]

The only thing that will ever be reported on a 1098-T is qualified education expenses. The qualified education expenses are tuition, books, and lab fees. Now while lab fees is a rather broad category, that's it with no exceptions ever.

Room and board is not a qualified expense. However, there are situations where monies targeted for educaiton can be used to pay for room and board, provided that room and board is in *direct support* of the education.

For example, if you are the named benificiary of a Coverdell or 529 account, money from that account can be used to pay for the qualified education expenses of tuition, books and lab fees as well as the unqualified but allowed expense of room and board *provided* that room and board is in "direct support" of the education.So what do I mean by "direct support"?

If you are enrolled as a full time student for the spring semester (Jan May) then while room and board is not a qualified expense, it's an "allowed" expense for 529 funds only for those 5 months. If you take the summer off (June-July) and do not attend classes yet you continue to live in the area of your college and pay for room and board, then for those two months the claim/deduction is not allowed. Since you didn't attend classes for June-July, your room and board expenses were not in "direct support" of the education.

THere's also limits on what you can claim for room and board.

Room is defined as rent, utilities and any maintenance/HOA dues you may be required to pay.

Board is defined as food basically.

Your room cost (rent, utilities, etc.) are limited to a maximum of $10,000 for the year or whatever it would cost you to live on campus - whichever is *lower*.

Your board (food cost) is limited to $5000 a year or whatever it would cost you to eat on campus if your school offers a food plan - again, whichever is *lower*.

Take special note that transportation costs are never a deductible education expense.

[ostragoth]

Hi Carl,

Where did you find these limits:

"Your room cost (rent, utilities, etc.) are limited to a maximum of $10,000 for the year or whatever it would cost you to live on campus - whichever is *lower*.

Your board (food cost) is limited to $5000 a year or whatever it would cost you to eat on campus if your school offers a food plan - again, whichever is *lower*."

Do you know what those limits are for 2020? Thanks,

[KathrynG3]

Actually, room and board is no longer deductible for the education credits, but it would not be taxable if the monies necessary for room and board were distributed from a Coverdell ESA or 529 plan. This was an old post; tax law is constantly changing.

See Is room and board deductible?

IRS Publication 970: Tax Benefits for Education

@ostragoth

[Coachkelly15]

My non-dependent son attended two different universities in 2020, one in the US and one abroad.  He is on full scholarship.  He received a 1098-T for tuition expenses and a separate letter stating how much his room and board expenses were and how much was paid for his insurance as well.  Reporting the tuition is not a problem.  Where do I report "room and board" and insurance?

Thank you.

[KrisD15]

Insurance is not an education expense, but you can enter it under Medical Expense. 

Why do you want to report the Room and Board expense? The education credits cannot be based on room and board expenses. 

The TurboTax program will ask for room and board if there is also a 1099-Q entered to offset the distribution. 

Scholarship funds used to pay room and board are taxable funds, so Room and Board is irrelevant for credits and does not offset tax on scholarships.

UNLESS you want to allocate scholarships to room and board in order to have more tuition, fees, books and supplies for an education credit. 

SO

If you want the scholarships applied to tuition only, don't worry about room and board. Any excess scholarship will be taxable regardless. 

If you want to use scholarship for room and board so the student has expenses to allocate to a credit, subtract as much of the room and board as you want from Box 5 when you enter the 1098-T. Then enter that same amount as Other Income with SCH as the description. 

It is helpful if you understand what you're doing. 

IRS Pub 970 is quite helpful. 

Remember that the American Opportunity Tax Credit may only be claimed 4 times per student, no matter who (you or the student) was the taxpayer who claimed it.

IRS Pub 970