1098-T Form Error

[Steve Bottorff]

I am using Turbo Tax Home & Business 2021 and the 1040 line #1 calculation is incorrect when entering a 1098-T form with grant $ greater than qualified tuition expenses. In the 2020 software, the 1040 line #1 correctly included the excess grant $, and it also (per IRS pub970) correctly included the text, 'SCH' and the excess grant $ amount in the 1040 line #1 description. 

How do we get Turbo Tax to update the forms & calculations?

thanks,

Steve

[Hal_Al]

There is nothing to update.  Scholarship income must be entered at Deductions and Credits / Educational Expenses and Scholarships. 

Taxable scholarship is not entered in the income section of TT. 

[Steve Bottorff]

Hi Hal_Al-

I do not following the reply.

I entered the grant and qualified education expense data correctly in the 1098-T form in Turbo Tax Home & Business 2021.  The error is Turbo Tax is not complying with IRS pub 970. IRS pub 970 says the excess grant $ received (over qualified education expenses) should be included on line #1 with the 'SCH' and excess $ amount in the description. 

Are you saying to work around the Turbo Tax error, to manually enter scholarship income so it is correctly reported in the 1040 line #1?

thanks,

Steve

[Hal_Al]

If you entered it correctly, where you are supposed to, TT puts excess (taxable) scholarship on line 1 of form 1040 with the SCH notation.

If that's not happening, you've entered it wrong or don't understand what is supposed to happen. 

You really haven't described the problem very well.  What are your numbers, boxes 1 & 5 of 1098-T? Other qualified expenses? Are you claiming the AOTC?  What result are you expecting?  What result are you getting?

Are you aware that you may be able to claim the  American Opportunity Tuition Credit (AOTC) even if you student has a full scholarship.  TurboTax (TT) may be using some of the expenses for the AOTC.