How do I address on my 1040 form that 1098-T from my daughter's college makes it appear she received scholarships in excess of tuition & fees paid, which is not the case.

[fengle]

My daughter, whom we still claim as a dependent on our taxes, graduated college in May 2017.  The 2017 Form 1098-T from her college shows $0 in Box 2 (tuition billed), which is correct because her Spring 2017 semester fees were billed in 2016, not 2017.  1098-T Box 5 shows $4,500 of scholarships were applied for Spring 2017 semester, which is also correct.  But the timing difference in how the school shows spring semester (tuition billed goes on previous-year 1098-T and scholarships applied go on current year 1098-T) makes it appear that she received scholarships in excess of tuition and fees paid, and that is not the case.  The 1098-T is in daughter's name.  Will IRS be asking her why she didn't declare an extra $4,500 of income on her tax return, since the 1098-T makes it look like excess?  Or can I address this somehow on our taxes?

[Hal_Al · Accepted solution]

The 1098-T is only any informational document. The numbers on it are not required to be entered onto your tax return. Just don't enter it, if you are not claiming anything.

Alternatively, In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 2. You will then be able to enter the actual amounts paid; apparently $4500, in your case.

[fengle]

Fengle here (I asked the question).  To clarify, tuition & fees for Spring 2017 were billed AND PAID in Dec 2016, the scholarship was applied in Jan 2017, and the amount billed exceeded the scholarship amount so there were no excess scholarship funds left over.  Not sure if your suggestion will work, as again the payment was NOT in 2017.  Also, we are not trying to get any higher learning tax credits....we don't qualify due to income limits.  Just concerned that the 1098-T makes it look like there were excess scholarship funds when there were not.  Every semester of her college, the tuition & fees billed amount always exceeded her scholarships received.

[Hal_Al]

As long as you did not count the $4500 you paid in December for the tuition credit, you can still use either of the two methods previously described.
1. Just don't enter the 1098-T. It is not required to be reported.
2.  In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 2. Enter $4500. That's what you paid, even if it was in the previous year. That will "zero out" the box 5 amount.