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mavi0222
New Member

My mother included my tuition/scholarship on her taxes (I am her dependent), do I have to as well?

 
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Accepted Solutions
Hal_Al
Level 15

My mother included my tuition/scholarship on her taxes (I am her dependent), do I have to as well?

The simple answer is no. She  reports it on her return, since you are her dependent. The tuition credit goes to the person who claims the student's exemption (dependency).

The long answer is more complicated. The 1098-T is only any informational document. The numbers on it are not required to be entered onto your tax return. If you claim the tuition credit, you do need to report that you got one. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly have taxable scholarship income. You claim the tuition credit, or report scholarship income, based on your own financial records. Unfortunately that sometimes means working around the 1098-T and the TurboTax interview.

If your qualified higher education expenses (QHEE -tuition, fees and course materials) exceed your scholarships, she may count the net you  and she paid, in claiming the tuition credit, on her return. However, if your scholarships exceed your QHEE (they paid for room & board too), the excess is taxable income and gets reported on your return.

There is also a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents 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 2. 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.

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2 Replies
Hal_Al
Level 15

My mother included my tuition/scholarship on her taxes (I am her dependent), do I have to as well?

The simple answer is no. She  reports it on her return, since you are her dependent. The tuition credit goes to the person who claims the student's exemption (dependency).

The long answer is more complicated. The 1098-T is only any informational document. The numbers on it are not required to be entered onto your tax return. If you claim the tuition credit, you do need to report that you got one. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly have taxable scholarship income. You claim the tuition credit, or report scholarship income, based on your own financial records. Unfortunately that sometimes means working around the 1098-T and the TurboTax interview.

If your qualified higher education expenses (QHEE -tuition, fees and course materials) exceed your scholarships, she may count the net you  and she paid, in claiming the tuition credit, on her return. However, if your scholarships exceed your QHEE (they paid for room & board too), the excess is taxable income and gets reported on your return.

There is also a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents 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 2. 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.

Texas Roger
Level 15

My mother included my tuition/scholarship on her taxes (I am her dependent), do I have to as well?

If you had scholarships that paid for non qualified expenses such as room and board, you must report them on your tax return. They are taxable on the student's tax return regardless of who claims the student as a dependent.

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