I paid college tuition through the florida prepaid college fund and did not receive a 1098-t. can i still get a deduction for what the prepaid fund paid out?

[gooandboo1]

is the prepaid fund considered a grant?  i bought the prepaid plan several years ago and now it pays the university directly

[Carl]

It's a scholarship. If you can, log into your online college account and go to your financials section of your account. You'll see all you need there. Understand this:
 - Scholarships, grants and 529 funds are reported as taxable income (initially) in the tax year they are received. It does not matter what year that scholarship or grant is *for*.
 - Qualified education expenses are reported/claimed in the tax year they are paid. It does not matter what year was paid *for*.
Remember that colleges work in academic years, while the IRS works in calendar years. So the reality is, it takes you 5 calendar years to get that four year degree. SO don't let that confuse you.
Finally, if you are an undergraduate that was under the age of 24 on Dec 31 of the tax year, changes are extremely high that your parents qualify to claim you on their tax return. If they do, then chances are even higher that your parents are the ones who will claim all the education stuff on your parent's tax return.

[Hal_Al]

Did you get a 1099-Q for what the FL prepay plan paid?

[gooandboo1]

yes, we received the 1099-Q

[Hal_Al · Accepted solution]

Yes, you can still claim a tuition credit or deduction, but that might make part of your Florida prepaid college fund distribution taxable.

You can not double dip. You cannot count the same tuition money, for the tuition credit,  that gets you an exclusion from the taxability of the earnings (interest) on the FL plan. Since the credit is more generous; use as much of the tuition as is needed for the credit and the rest for the interest exclusion. 

Total qualified expenses (including room & board) less amounts paid by scholarship less amounts used to claim the Tuition credit equals the amount you can use to claim the earnings exclusion on the 1099-Q. 

Example:
  $10,000 in educational expenses(including room & board)

   -$3000 paid by tax free scholarship

   -$4000 used to claim the American Opportunity credit

 =$3000 Can be used against the 1099-Q (usually on the student’s return)

Box 1 of the 1099-Q is $5000

Box 2 is $600

3000/5000=60% of the earnings are tax free

60%x600= $360

You have $240 of taxable income (600-360)

[MeganS]

You can claim education credit or deduction even if you did not receive a form 1098T .  After you enter the school name in the Education section, you will be asked if you received a Form 1098 from this school.  Answer no, and you will be asked to enter the qualified expense on the next screen.  This will include all expenses whether paid by a loan or a grant.  Your grant income input will be asked for later and will reduce the qualified expense amount. Expenses paid for with school loans are the same as being paid by you and may qualify you for a credit.