Qualified Educational Expenses

[PurpleOrangeMango]

Hello! I am calculating someone's qualified educational expenses (to determine what part of a scholarship is taxable) and getting a number lower than their university provides for qualified educational expenses. I realize that the difference is really that the university 1098T seems to count room and board (mandatory to purchase those specific plans) as qualified expenses. I know room/board ordinarily would not count, but since the university itself counts them, would that in this case allow the usage of the higher, university-provided number since the university itself determines they are qualified? Looking at the university 1098T for other years (where housing and room and board are NOT required, they are NOT counted it seems)

[Bsch4477]

Room and board are not qualified education expenses for education credit. 

[PurpleOrangeMango]

I know they do not count for educational credit, I am more unsure of when determining excess scholarship (taxable part of the scholarship). Since the university provided these numbers officially, I wonder if I should use them. Since the university considers them qualified/requires of students, are they then more of a fee?

[Hal_Al]

Q. I know that room and board do not count for educational credit, I am more unsure of when determining excess scholarship (taxable part of the scholarship). Since the university provided these numbers officially, I wonder if I should use them?

A. Simple answer: No. Room and board (r&b) are not qualified expenses for scholarships to be tax free. 

Q.  Since the university considers them qualified/requires of students, are they then more of a fee?

A. No. 

The fact that the school has erroneously included r&b in box 1 of the 1098-T does not change that. The school appears to be relying on the wording in Publication 970, "Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses". But the next paragraph, in Pub 970 (page 6), specifically says:

"Expenses that don't qualify (for tax free scholarship).

Qualified education expenses don't include the cost of

• Room and board". 

https://www.irs.gov/pub/irs-pdf/p970.pdf

[NCperson]

@PurpleOrangeMango - contact the University; I highly doubt they included room and board.  it's more likely other expenses that you have not considered.  And if by some fluke, the university did indeed include room and board, you still can't count them as QEE - you have to follow the IRS rules as you are responsible for your tax return (the University isn't 😀).