The 1098-T from your school shows how much you paid in tuition in box 1 and how much you received in Scholarships and Grants in box 5.
Do you have taxable income? Was box 5 scholarships more than box 1 tuition expenses? Are you using ABLE funds to pay for schooling?
I am assuming you are in your first 4 years of school and an adult over 23 years old since you said you are just starting school and you are disabled.
You may be able to use the 1098-T to claim an education credit, if you qualify. If you have taxable income high enough that you have a tax liability, you may be able to claim the full American Opportunity Tax Credit. If you do not have taxable income, you may still be able to claim the refundable portion of the AOTC if you paid for the tuition and fees out of pocket or through a loan.
To enter it select the following:
- Federal
- Deductions and Credits
- Education
- Form 1098-T
If your tuition was fully paid for by grants or scholarships, then generally you would not be able to claim an education credit and you would not need to enter your 1098-T on your return, unless box 5 is greater than box 1 and results in taxable income. There is an IRS allowed loop hole to this which is treating your scholarships and grants as taxable income that was used to pay for room and board. If you use the grants to pay for room and board (living expenses other than qualified education expenses) you could still claim the refundable portion of the AOTC. To do this, in TurboTax, when you are asked was any of the scholarship used to pay for room and board answer yes and enter the amount. Also, be sure to include any other required books and expenses that you did not pay directly to the school. If you have no other income, then it is likely that your standard deduction will wipe out the scholarships and grants you claim as taxable income.
The AOTC is worth up to $2,500 which consists of a maximum $1,000 refundable portion or 40% of your expenses up to $4,000.
If you used ABLE funds to pay for your education, then you would not need to enter this on your return as the ABLE funds are tax free when used for qualified expenses and you cannot "double dip" meaning you cannot take a tax credit for expenses that are paid for with tax exempt income.
NOTE: If someone else claims you on their return, they would enter the 1098-T on their return to claim any education credits. You cannot claim an education credit if you are claimed as a dependent on someone else's return.
If you have passed the first four years of your education, then you would not qualify for the American Opportunity Tax Credit. However, if you did have taxable income that leads to a tax liability, then you may be able to claim the $2,000 NON Refundable Lifetime Learning Credit
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