Grad Student: Tuition Split between 2018 and 2019 1098-T. Box 2 not filled out last year, now return is being reduced by $1.6K

[buckeyebrit93]

Hi! So I am a current graduate student on a full-tuition scholarship (with no additional scholarship or stiped). Last year I filed my taxes and put in my 1098-T form, where my tuition paid was shown as higher than the scholarship I received (but I didn't think anything of it because honestly I was swamped with school and didn't fully pay attention). Box 7 (showing that some of box 1 was for Jan-March of 2019) was checked but Box 2 was empty. This year, when I went to file my taxes, it is now showing that my scholarship received is roughly ~13K higher than the tuition I've paid. When I did some digging, half of my spring 2019 tuition was put on last year's form (with box 7 checked but box 2 empty) and a half was put on this year's form. Now my refund is being reduced by ~$1.6K, which I assume is because it appears I'm receiving nearly ~13k in stipend money (I wish!). I've read that you technically don't need to report the 1098 form, but I don't want any trouble down the line. How can I fix this? I don't want to pay taxes on money that I never even had in my account (it went straight from being dispursed to paying off my bill in the registrar). 

[Carl]

Box 2 not filled out last year,

That's because box 2 is not longer used as of the 2018 tax year. Only box 1 for amounts actually paid to/received by the school before Dec 31 of the tax year, regardless of what tax year the payment was for.

Colleges work in academic years. The IRS works in calendar years. So the reality is, it takes you five calendar years to get that four year degree. With that said;

- Scholarships, grants, 529 distributions are reported as taxable income *INITIALLY* in the tax year they are received. it *does* *not* *matter* what tax year that money is *for*.

- Qualified education expenses are claimed in the tax year they are paid. It *does* *not* *matter* what year is paid *for".

The taxability of scholarships, grants and 529 distributions is offset by the "qualified" education expenses they are used to pay for in the same tax year the money was received.