How do I control how my Qualified educational expenses (QEE) are allocated when using the Online Turbotax version

[newusernameagain]

I am entering my dependent's 1099-Q and 1098-T on my tax return and getting the following results:

1099-Q ESA Distribution = 25,544

30,258 in educational expenses (including room & board) 

-$2714 paid by tax free scholarship

- 2,000  used to claim the AOTC credit TURBOTAX AUTOMATICALLY SET THIS AMOUNT

25,544  Can be used against the 1099-Q 

I found another post that explained how to change the amount allocated to claim the tuition credit but it does not seem to apply to the Online version. How can I control how the QEE is allocated?  Turbotax seems to be allocating to the AOTC. I may just leave it this way, but it would be nice to understand how to control it.

The other Post said to do this: 

Go through the entire education interview until you reach a screen titled "Your Education Expenses Summary".  Click edit next to the student's name. That should take you to a screen “Here’s your Education Summary”. Click edit next to “Education Information”. When you get to the screen titled “Amount Used to Calculate Education Deduction or Credit”, verify the amount you want to use or change it.  You may reach that screen sooner.  THERE IS NO screen titled "Amount Used to Calculate Education Deduction or Credit"

The other post also said Turbotax should have allocated according to the following:

"There are three things you can do with your Qualified educational expenses (QEE):

1. Allocate then to scholarships (so that the scholarship remains tax free)
2. Use them to claim an education credit
3. Allocate them to the 529 distribution (1099-Q) so that it will not all be taxable

TurboTax allocates QEE, in that order, until you tell it otherwise."

[RaifH]

Once you have entered all qualified education expenses and the education savings account withdrawal to pay for your child's education, you can allocate the expenses how you choose to maximize the tax benefits. To play with the amount that TurboTax allocates to the American Opportunity Tax Credit in TurboTax Online:

1. Select Start/Revisit next to Federal > Deductions & Credits > Education > Expenses and Scholarships (1098-T)
2. Select Edit next to the student's name.
3. Select Edit next to Education Information.
4. Confirm the information that determines the student's eligibility for any education credits.
5. You will come to a screen Choosing a larger education credit. You can select any amount between 0 and 4000 to allocate to the American Opportunity Tax Credit and see the impact it has on your refund. 

If you did not enter the information correctly that would qualify the student for the American Opportunity Credit, you may not have seen that screen. Make sure you answer they are working on a degree, at least half-time or full-time student, they have not completed four years of college, they have not received an education credit for more than three years, and they have not been convicted of a felony drug offense.

[Hal_Al]

It's important that you enter the 1099-Q before you enter the 1098-T.  

Try deleting both and starting over. 

PLAN B.  On the Student Information Worksheet (abbreviated Student Info Wk on the forms list), go to part VI and change line 17 ("Used for credit") to $4000. Make the change in the first column.  That will automatically change the other columns.

[newusernameagain]

I went thru all the screen noted in your reply and I still don't see Choosing a larger education credit.

I get to the end of the question "were they convicted of a felony" and it then takes me to "Here's Your Education Summary" . I don't see the option Choosing a larger education credit at that screen.

Turbotax definitely acknowledges  she is qualified for the AOTC so that is not the problem.

This is my third year running the EDUCATION section (and claiming the AOTC)  using the ONLINE version and I dont ever remember a prompt to choose a different education credit.

[newusernameagain]

I definitely did enter the 1099-Q before I entered the 1098-T since I was following the order of the program.

Ouch I really hate to delete those forms, everything has been triple checked and except for being able to play with the numbers a little  I was all set to file.

I like Plan B Better but I dont see how to modify the Student Information Worksheet in any forms list. The Online version only gives me the option to delete a form, not to change it.

Am I missing something in the online version that lets me change that worksheet?

[Hal_Al]

I have desktop, so I'm not personally familiar with online.  But, I recall hearing you can make changes on the worksheets but not on the actual IRS forms. 

Open the student info work sheet, click on the first box (Total) on line 17 (Part VI) and see if you can change it. 

[newusernameagain]

I like the idea to change the student info work seet. The problem is that under "Tax Tools" (online version) the only choice I get regarding FORMS is to delete one. I show below the choices I get unter "TAX TOOLS" and I don't know where else I would look. 

I see all the IRS Forms and Worksheets when I click on "Delete a Form" but there is no option to modify them.

 

Other helpful links...

• View Tax Summary
• Clear & Start Over
• Delete a form
• Save your 2021 return to your computer
• Transfer last year's TurboTax return from your computer
• File an extension
• Share my file with Agent

I don't think the Online verision gives you the option to re-allocate QEE or to modify individual forms unless I am just not seeing how.

[newusernameagain]

I  was attempting to make sure I complied with Hal_AL's suggestion regarding the order of entering the 1099-Q and Expenses but Turbotax ONLINE forces you to enter the Education expenses first. You won't get a prompt to enter a 1099-Q until you enter the expenses.

See the  the message below . The program forces me to enter the Education section first and then come back to the 1099-Q even though I started trying to enter the 1099-Q. I  remember now on my real return starting with the 1099-Q but having to circle back to it after entering the Expenses. 

Like I said, THERE DOES NOT SEEM TO BE ANY WAY TO ALLOCATE QEE in Online TT other than to accept what TT chooses. Can anyone confirm this? I would love to see a screenshot of the Online TT  asking to change the QEE allocation for AOTC.

Message when attempting to enter 1099-Q the first time:

You don't need to enter this 1099-Q info

Because you're not the Recipient of this 1099-Q, you don't need to enter this 1099-Q here. Your return isn't affected, so here are your options.

Since you're not the recipient of the 1099-Q, you can just skip entering it   Or, you can add your student's education expenses first, then come back here and enter this 1099-Q info to see if the amount is taxable for the recipient. (This will not affect your return but may help you if you are also preparing the Recipient's return.)