Heres the deal, my son started school last fall. I received a 1099 t for the fall semester. I paid his tuition etc for the spring semester in Jan. Do I claim the spring semester on this years taxes, or next years? (the 1099t only covers fall) Thanks for the help!
The general rule is that you can deduct (or use as the basis for a credit) on your income tax return those qualified educational expenses that you actually paid in that tax year, for attendance at an eligible educational institution during that tax year.
However, there is an exception (to allow for the way colleges actually register students for classes and issue bills) that you can deduct amounts paid in a tax year, for an academic period beginning in the first three months of the next tax year.
In your case, you can deduct the amounts paid in 2016 for you student's Fall semester. You cannot claim on your 2016 tax return the amounts paid in January 2017 for the Spring semester; those will be included on your 2017 tax return.
If you had paid for the Spring semester in December 2016, you could have claimed those amounts on your 2016 tax return.
Is there an option to take the deduction in 2017 in this case? My case is that I paid for college on 12/28/15 for 2016 Spring semester and would like to take the credit in 2016 since it was not taken in 2015.
According to IRS Instructions for Form 8863 for 2017, "[q]ualified education expenses paid in 2017 for an academic period that begins in the first three months of 2018 can be used in figuring an education credit for 2017 only". According to the same publication, "academic period" is defined as payments made in the calendar year for academic periods beginning in the calendar year or in the first 3 months of the following year. Payment made in 2015 cannot be used in 2016.
My situation. My 2017 1098-T shows billing for Winter 2018 and scholarships awarded for that same semester. My payment was sent and dated via check in Dec 2017 but not shown paid by university until early Jan 2018. How do I treat that payment? For 2017 and match up with the 1098-T or will it be counted towards 2018 tuition payments and 2018 taxes next year?
just a note, if you had any student loans or 1099Q payments in 2017, they would count as eduction expenses paid in 2017. We are under same issue, our school started requiring payment in December an prior year it wasn't till January, doubling the education costs for 1 year. We were saved as the stafford loan wasn't paid till 2017 and were able to claim that payment.
THIS POST GIVES INACCURATE INFORMATION. As stated in the comment above, "Qualified education expenses paid in 2017 for an academic period that begins in the first 3 months of 2018 can be used in
figuring the tuition and fees deduction for 2017 only." There is no "exception" as noted above.
simplistic approach is the 1098-T is purely informational. You report when you actually pay the expense and you can NOT prepay for anything other than up to the first 3 months of the following year.
I am so confused. I think my brain has turned to mush.
I paid for my courses December of 2019. I have not received any tax documents from the school.
My classes started January 21,2020.
Do I claim my payment on 2019 taxes?
It asks if I was a full time student in 2019 and I was not as all of my classes started in this week.
Hi Stephani,
Were you able to figure this question out? I am currently in the same boat. My classes just began in 2021 but I paid for courses and supplies in December 2020.
You report the expenses you paid in the tax year that you paid AND the costs must be for classes you took that tax year and/or the first three months of the following year.
Again, only what you paid top the school in 2020 should be on the 2020 1098-T.
Whatever you paid in 2020 are expenses you can claim if those expenses were for classes you took in 2020 AND/OR the first three months of 2021.
So, if your classes start January, February or March 2021, if you paid in 2020, you claim those expenses on your 2020 tax return. If you paid or will pay for them in 2021, they will go on your 2021 tax year return next year.
BUT- if you paid late in 2020 for classes you took in 2019, the expenses don't count. You can't pay late the following year and you can't pre-pay further than the first three months of the following year either.
Thanks Kris! and as far as answering the "current student" question? Do I just enter "no" since I just began my program last week instead of 2020?
ANSWER YES.
If you paid for classes in 2020 that started in 2021 (and I assume you did or you wouldn't be asking this) answer Yes, that you were a student in 2020.
Additionally, the 1098-T might report that you were less than half-time if you didn't attend in 2020, but that is not true for taxes.
According to the IRS:
“For 2020, treat an academic period beginning in the first 3 months of 2021 as if it began in 2020 if qualified education expenses for the student were paid in 2020 for that academic period.”
So Yes, you were a student in 2020 and yes "at least half time"
Here is the situation.
We do qualify for the AOC Credit. However, the expenses that we paid for in December of 2020 need to be be claimed on our 2020 taxes.
Here is the issue.
We are required to have a federal i.d number even though which is provided on our 1098-T form. We have not been issued a 1098-T form and in order to receive this credit you must provide the federal i.d number. This number is almost impossible to find so any help would be appreciated.
If you paid an eligible education institution, they should provide to you their EIN number.
Call the school's administration office or student aid office to get that number. It might also be listed on their website.
The student should have an online student account. Check that online account to make sure the payment was posted in 2020. That online account might also hold the 2020 1098-T for the student.
Sorry I feel I am beating a dead horse here BUT, I feel my situation is slightly more unique though i fear the answer is the same.
Basically like most here I paid for most of my spring 2020 semester in December 2019, this tax return I was applying for the Lifetime Learning Credit but did not qualify because the amount in box 1 is about 5000, and my scholarship is 7500. So to them it seems I had extra income when in reality my tuition I PAID was about 15000 total and the scholarship was on top of that.
Any suggestions on what I can try and do? Seems like Im getting shorted to me.
The scholarship can be allocated to room and board. This gives you some taxable income but also allows the credit which far exceeds the tax. I recommend you look at another of my answers for help.
So if I understand correctly, it seems I would allocate some of that scholarship money into my income, and then when asked of scholarships use the remainder of the scholarship there in box 5? And that will allow me to get the life time learning credit?
I just want to be clear about it sorry if these questions are monotonous. I appreciate your help!!
Follow up question that seems obvious but I want to make sure I have no problem with my taxes, if I claim some of my scholarship as income for room and board, would that change the amount I put for box 5? Thank you!
Box 5 of the 1098-T shows the amount of scholarships and grants that were paid directly to the school for the student's expenses. Scholarships and grants may reduce the amount of qualified expenses the student can use when calculating a credit, but you should not change the amount that appears on your 1098-T. The information must match because the school furnishes the same data to the IRS.
Here is a TurboTax article with more information about form 1098-T.
Like most students here I paid about $27000 for my spring 2020 semester tuition in December 2019, therefore my 2020 1098-T Box 1 only shows about $3000 tuition expense, Box 5 shows about $5000 scholarship grants. In 2019, I was claimed as dependent on my parents' tax return, and they could not take any education credit because of income limit.
I graduated in 2020 summer. Now when I am filing my own 2020 tax return as independent, am I disqualified for claiming any education credit because my 2020 1098-T Box 1 is less than Box 5? Is there any remedy solution for this situation? I also took out 529 plan distributions to pay for my education expenses, do I have to pay tax on 529 earnings?
@yw2 When entering your 1098-T, under the entry for Tuition, you can indicate 'this is not what I paid to the school' and enter the amount you actually paid, since your parents did not get an Education Credit for you in 2019 using that amount.
The IRS is aware that 1098-T's are not always correct, and this issue of crossover of payments exists. Keep records of what you paid for 2020 tuition.
Click this link for instructions on How to Enter a 1098-T.
Your 529 distribution is not taxable if all funds were used for Education Expenses (including Room and Board). If this is the case, you don't need to enter your 1099-Q into your return at all. Just keep it for your records.
Click this link for more info on Form 1099-Q.
I might have messed up. I bought a computer for online classes in Spring 2020 on December 8, 2019. Should this have been reported in my Tax 2020 or Tax 2019? I am wondering if I need to amend my Tax 2019. I had no 1099-T for 2019 because I have not started school that semester until January 2020. Could you help?
While the computer generally needs to be deducted in the year in which it was purchased, but since you were not in school until 2020 and did not use the computer until then, you can claim in in 2020.
Hello,
If I was billed for attending a fall semester in 2020, but did not pay the bill for that fall 2020 semester until January of 2021 (due to late reimbursement process from my company), can I still claim an AOTC credit for 2020 taxes even though I paid them technically in 2021, or do I need to wait for the next year to claim the credit when I file my 2021 taxes?
Thanks!