Education award

Forum|Forum|7 years ago
June 5, 2019
1 reply
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My son received a national merit scholarship. The 1098 from the school a) includes tuition for fall 2016 and winter 2017 b) only includes scholarship amount for fall 2016 c) does not include the housing award he received. How do I accurately reflect his awards and costs for my 2016 tax filing?

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You are allowed to claim, on your 2016 tax return, qualified tuition and fees actually paid during 2016 for any academic period (semester, term, quarter, summer session, etc.) beginning during 2016. You are also allowed to claim qualified tuition and fees actually paid during 2016 for an academic period beginning during the first three months of 2017.

The amounts paid must be reduced by the amount of any tax-free scholarships. Since the amount of the Winter 2017 scholarship is (presumably) known, you should take it into account in determining the amount of any available tax credit.

Enter your Form 1098-T exactly as you see it. Here are some important tips:

If any boxes on your 1098-T are blank, leave them blank. Don't enter 0 (this may cause errors later).
If boxes 1 or 2 on your 1098-T form are wrong, enter those amounts anyway. Then click What if this is not what I paid? right below box 2 and enter the correct amount of tuition paid.
Don't include grants or scholarships not already listed in Box 5. We'll ask about those later; that is where you should enter the Winter 2017 portion of the merit scholarship.

I would advise you to contact the school's financial aid office about the housing award. Since room and board are not tax-deductible, I am concerned that your son's housing award may constitute taxable income that he would have to report.

A

Anonymous

Answer

You are allowed to claim, on your 2016 tax return, qualified tuition and fees actually paid during 2016 for any academic period (semester, term, quarter, summer session, etc.) beginning during 2016. You are also allowed to claim qualified tuition and fees actually paid during 2016 for an academic period beginning during the first three months of 2017.

The amounts paid must be reduced by the amount of any tax-free scholarships. Since the amount of the Winter 2017 scholarship is (presumably) known, you should take it into account in determining the amount of any available tax credit.

Enter your Form 1098-T exactly as you see it. Here are some important tips:

If any boxes on your 1098-T are blank, leave them blank. Don't enter 0 (this may cause errors later).
If boxes 1 or 2 on your 1098-T form are wrong, enter those amounts anyway. Then click What if this is not what I paid? right below box 2 and enter the correct amount of tuition paid.
Don't include grants or scholarships not already listed in Box 5. We'll ask about those later; that is where you should enter the Winter 2017 portion of the merit scholarship.

I would advise you to contact the school's financial aid office about the housing award. Since room and board are not tax-deductible, I am concerned that your son's housing award may constitute taxable income that he would have to report.