2539957
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Attend our Ask the Experts event about Tax Law Changes - One Big Beautiful Bill on Aug 6! >> RSVP NOW!
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

divanailsalonsr-
Returning Member

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

 
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

13 Replies
MinhT1
Expert Alumni

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

You do not report the excess of scholarships over tuition on your tax return.

 

Your daughter has to report the scholarship on her own tax return. She will indicate that she can be claimed as a dependent by someone else.

 

Please also read the excellent answer by Champ Hal_Al in this Community thread on claiming the American Opportunity credit.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Hal_Al
Level 15

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

Simple answer: you don't enter it anywhere.  But, taxes aren't simple.  If that is her only income, she does not need to report it, because it is below the filing threshold of $12,550*.  If it does need to be reported, it goes on her tax return, not yours. 

 

If she does need to enter it, it gets entered in the educational expenses section, of TurboTax (TT), not in the income section.  Basically, TT sees the $4000 difference between box 5 and box 1 and treats it as taxable. Entering book and computer expenses can reduce the taxable portion. 

 

*You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2021 if he had any of the following:

  1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,550 (2021).
  2.          Unearned income (interest, dividends, capital gains, unemployment) of more than $1100.
  3.          Unearned income over $350 and gross income of more than $1100
  4.          Household employee income (e.g. baby sitting, lawn mowing) over $2300 ($12,550 if under age 18)
  5.          Other self employment income over $432, including money on a form 1099-NEC

__________________________________________________________________________________

There is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.

Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $5000 of taxable scholarship income, instead of $6000.

 

 

divanailsalonsr-
Returning Member

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

Thank you so much for your help

 

divanailsalonsr-
Returning Member

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

Thank you for replying. 

There is a question asking if she pays more th a half of her expenses?   Her scholarship is 14k and tuition is 10k.  She used the other 4knfir boarding and I have to pay another 10k.  In order to answer yes to the paying more tha. Half of her expenses?  Does she need to make 12k in w2 or less or more?

I noticed that when I answer that she pays more tha. Half of her expense. She is partially dependent on my return ans my refund was over 4k.  When I said no that she didnt pay for galfbof her expenses. She becomes my dependent amd my refund came down to 500.  Would it be better if she works and how much should she work?  Thank you

 

Hal_Al
Level 15

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

@divanailsalonsr-  said "I noticed that when I answer that she pays more than Half of her expense. She is partially dependent on my return and my refund was over 4k.  When I said no that she didnt pay for half of her expenses. She becomes my dependent and my refund came down to 500."

 

Sorry, that doesn't make sense. You must be doing something wrong. 

 

As to the question " In order to answer yes to the paying more than Half of her expenses?  Does she need to make 12k in w2 or less or more?  It's complicated.  But, there's a simple answer: Just say no  to the support question.  Scholarship is not counted as support for the dependent support test.  So unless she has a high paying job and/or large investment income, she did not  pay more than half her own support.  

 

There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

  1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
  2. He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
  3. He lived with the parent (including temporary absences such as away at school) for more than half the year

 

So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

 

Note that the requirement is not that you(the taxpayer) provided more than half his support.  The requirement is only that the child did not provide more than half his own support.

Self support https://ttlc.intuit.com/community/taxes/discussion/re-i-m-not-sure-what-to-put-when-it-ask-did-i-sup...

 

 

 

 

 

divanailsalonsr-
Returning Member

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

Thank you Hal_Al

 

Maybe because I went back to ađd her 1098t.  I forgot to enter it before .  Let me go back and check on it again.  Thank you much for answering my questions.  I learn so much.

Xxsierra1986
Returning Member

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

@Hal_Al  how do you enter this loophole? I'm not understanding how to enter part of it as income so it becomes taxable. When I'm asked about room and board, is this where I enter the taxable amount of money I want to claim? 

 

Thanks!

Hal_Al
Level 15

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

divanailsalonsr-
Returning Member

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

For higher tax refund and financial aid purpose. What age can a child can be a independent on tax return?   Can she be a independent before 18 or while in high school? Is it better if she starts working to support more than half of her expenses starting first year of college or 12th grade?  If she Getz 14k for financial aid and spent 10k om tuition and books.  She has 4k as taxable income.  Let say her dorm and food is another 5k.  Does she need to make more tham half of 4k to say that she support more than half of her expenses?  Thank you

divanailsalonsr-
Returning Member

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

Hi Hal AL

Thanks again for helping.  I forgot to enter my daughter 1098t.when I efiled my federal tax.  My refund was about 5k. I went back entered 1098t and refund was about 500. I saved the file a before realizing that there is a amend tax tab.  So I went back and amend it. I forgot to save the file in a different location before trying to not claim her as a dependent and I saved it. Now I am so confused of what I did in the original turn which I efiled.  Is there a way that I can get the copy of the original file which I sent to the irs in TurboTax software.  I need to compare it to my amended file? Thank you

Hal_Al
Level 15

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

@divanailsalonsr-  You're looking for a simple answer to a complex question. There isn't one. 

 

Q.  What age can a child can be an independent on tax return?

A.  Simple answer: 19, if not a full time  student. See full dependent rules at: https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Ret...

 

 Q.  Is it better if she starts working to support more than half of her expenses starting first year of college or 12th grade? 

A. Neither. It's highly unlikely someone under 19 would be self supporting or even a full time student under 24.  The financial aid people are wary of young college students claiming independence. 

 

Q. If she Gets 14k for financial aid* (scholarships/grants) and spent 10k om tuition and books.  She has 4k as taxable income.  Let say her dorm and food is another 5k.  Does she need to make more than half of 4k to say that she support more than half of her expenses?  

A. No. Scholarships and the expenses they pay are ignored in the dependent support calculation. 

 

*Loans are treated differently from scholarships in the dependent support test. Co-signed loans are treated as parental support. Loans in the student's name only are self support. 

Hal_Al
Level 15

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

You're gonna need TT support to straighten that out. 

To contact TurboTax (TT) support:
https://turbotax.intuit.com/support/contact/index.jsp 

In the search line enter some keywords or question without quotes. On the next page, skip the suggested topic links and scroll down until you see CALL US.  It should show the wait times.   Free support is not available to Free Edition users. You will have to upgrade to talk to a representative.

Live help is available 7 days per week from 5:00 a.m. to 9:00 p.m. PST. (Jan 11- Apr 21)

divanailsalonsr-
Returning Member

My daughter has 1098T and box 5 ($14k)is higher than box 1(10k tuition). $4k is taxable income. Where do I enter that? She is a dependent on my tax return.

Thank you

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question