If I pay for school in december (for the next semester) what year do I claim the expenses on my taxes?

[AmyC]

The IRS says money paid is claimed in the year paid. This leads to scholarships paid and used. If you have a paper trail that shows the money was applied then you could. However, since you say tuition was billed in 2019, you can't take a credit for 2019 for bills paid if they were paid in 2020 with the scholarships. Go back to your 2019 return and see if you had the same situation of a carryover or if you need to amend your 2019 so that some of the tuition is actually a part of 2020. Your bursar account shows when things were paid.

The IRS says in Publication 970 (2020), Tax Benefits for Education | IRS: When figuring an education credit or tuition and fees deduction, use only the amounts you paid and are deemed to have paid during the tax year for qualified education expenses.

@norhanag

[SJ-63]

I have a similar situation to many folks here. I paid for my daughter's tuition in Dec 2019 for her 2020 spring classes (her final semester), but her 1098-T shows no payments in box 1 and 16K of scholarship in box 5. I have a couple of questions:

1. It seems that for my 2020 taxes, the entire 16K counts as income, is that correct?

2. If so, what is the best way to handle this? Can I have this reported on my daughter's taxes since she pays at a lower rate? My assumption is that I would then not be able to claim her as a dependent. 

3. TurboTax asks how much of this was applied to my tuition, can I claim the entire scholarship amount even though I paid the tuition in 2019?

Thanks

[AmyC]

1. If all the tuition went on 2019 return, then all the scholarship goes on 2020. Ouch!

2. Student claims the income. You should still be able to claim the student. See IRS Worksheet for Determining Support.

3. Maybe. You can use only the amounts paid in 2020. If the scholarship paid the tuition, then it was paid in 2020. Review your 2019 form. If you had excess tuition left after the credits claimed, then you can count that amount. However, you may have had scholarship that took all or most of it so there is nothing left after any education credits claimed. If you have been rolling tuition over each year, you may have tuition left. You may need to go back and review the freshman year forward taxes. There is also a recapture available.

For full information, see Publication 970 (2020), Tax Benefits for Education | IRS and worksheets to walk you through all your concerns and your specific situation.

@SJ-63

[Zaldim]

Preparing 1040 2021

i was not enrolled as a college student in 2021, and I didn’t get f 1098 T 

i paid tuition, books and laptop to use for semester beginning January 2022. 
can I deduct these expenses paid in 2021 in f 1040 2021? I didn’t get any form 1098

Thank you for your reply

[KrisD15]

Yes.

If you did not get a 1098-T you will need to get the EIN from the school to enter the information into the TurboTax program. 

According to the IRS:

"The lifetime learning credit is based on qualified education expenses you pay for yourself, your spouse, or a dependent you claim on your tax return. Generally, the credit is allowed for qualified education expenses paid in 2021 for an academic period beginning in 2021 or in the first 3 months of 2022. For example, if you paid $1,500 in December 2021 for qualified tuition for the spring 2022 semester beginning in January 2022, you may be able to use that $1,500 in figuring your 2021 credit."

[EricaW1]

My university has sent me a tuition bill in December 2022 for next semester starting in January 2023. Can I pay the bill using 529 distribution taken in 2022? Will this expense shown on 1098T of 2022?

Thanks 

[Critter-3]

Yes you can and yes the 1098-T should reflect the billed tuition and the payments you make.

[thneedle]

I paid for my Fall 2021 semester in August 2021, and my Spring 2022 Semester in December 2021. On my 2021 taxes last year I was able to claim all of the $2500 credit (tuition was $7000 each semester). Even though I finished school in 2022 is it true that I'm not able to claim the credit on this year's taxes? Am I out $2500 because I paid my tuition two weeks before 2022? really kicking myself for paying $14000 in 2021 when I could have just waited a bit to maximize the credit and get $2500 each year, it all came out of pocket so this hurts :( 

[Cynthiad66]

Don't be sad!  Just kidding.  Payments for academic periods Payments made in 2021 for academic periods beginning in 2021 or beginning in the first 3 months of 2022 can be used for the AOTC.  Based on the above statement found on the form 8806 you can use the payment in December.
 

Form 8806 Instructions this is 2022 instructions so the 2021 instructions would address your tax year.

Also, make sure that you have not claimed the AOTC for more than 4 years.  The form 1098T from the university will guide you in the deduction allowed for 2022.

If you have an amount on the Form 1098T box1 and it is more than the amount in Box 5, most likely you will get the credit if it has not been more than 4 years.

Payments for academic periods Payments made in 2021 for academic periods beginning in 2021 or beginning in the first 3 months of 2022 included in 2022 calculation for the credit.
 

[Carl]

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 4 year degree. With that said:

 - Scholarships and grants are claimed/reported as taxable income (initially) in the year they are received. It does not matter what year that scholarship or grant is *for*

- Tuition and other qualified education expenses are reported/claimed in the tax year they are paid. It does not matter what year they pay *for*.

[kimpayne2]

How do I correct this problem? I withdrew money from my son's 529 plan on Dec. 28th. I had to put it in my account because his school did not appear on the direct transfer from the 529 to the school. I had to wait a few days until it hit my account so that I could pay for his tuition ( I used all that I withdrew). So the payment went thru on Jan 5th.  My 1099-Q is reflecting the money I withdrew for the spring but my 1098-T doesn't reflect it because it was a different year. Help!

[Hal_Al]

@kimpayne2 

See previous discussions:

https://ttlc.intuit.com/community/college-education/discussion/529-provider-distributed-funds-on-12-...

https://ttlc.intuit.com/community/college-education/discussion/i-took-a-529-distribution-in-2021-for...

https://www.savingforcollege.com/article/timing-of-529-plan-distributions-must-match-qualified-expen...