How does the 1098-t affect student dependent filing

nrpnnrp · ‎July 14, 2020

SusanY1 · ‎July 14, 2020

It depends. It can be used to assist in reporting taxable scholarship income or, in some cases, to qualify for certain tax credits if they are not taken on the parents return.

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Hal_Al · ‎July 15, 2020

Simple answer: put the 1098-T on your return, because she is your dependent.

Longer answer: The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly your student has taxable scholarship income.

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. If you enter the information correctly, on your return, TurboTax (TT) will tell you if your dependents needs to report scholarship income. Rule of thumb: if box 5 of the 1098-T exceeds box 1, she has scholarship income.

But, there is a loop hole available to allow you to claim a tuition credit, even when most of her expenses are paid by scholarship. Reply back for details, if needed.