I have a 1098T that has an amount in box 1 and box 2. Turbo Tax is saying that a 1098T cannot have both. What do I do?

[GeoffreyG · Accepted solution]

The answer to your question is that you should use the amount shown in Box 1 of your Form 1098-T tuition statement.  This figure represents the amount you actually paid (or that your school acknowledges receiving) for the tax year.  It is also the figure that will be used -- minus any grant or scholarship offsets -- to determine what educational tax benefits you may be eligible to claim on your tax return:  American Opportunity Credit, Lifetime Learning Credit, or Tuition & Fees Deduction.

Box 2 of Form 1098-T is simply the amount your school "billed" or "invoiced," not what you actually paid.  Therefore, where someone has amounts in both Boxes 1 and 2 (and not every school reports Form 1098-T this way), it's very possible that they could be exactly the same number.  But whether the numbers are the same, or not, you should always use Box 1, and leave Box 2 blank in the TurboTax software.

That will not only resolve the software program issue, but give you the correct income tax result as well, by following the IRS rules.

Thank you for asking this question.