1098-T Help

[cindyggarcia16]

Hi, I just wanted to make sure I'm filing correctly for my parents.

So the situation is that my brother received the 1098-T form 2021

because my parents paid for his tuition last year for the school he attended in 2020. He didn't attend school in 2021 though. (In 2020 he was a full-time student in the spring then in the fall semester he became a half-time student. Also, he was pursuing an associate's degree.)

So according to the website he qualifies for the lifetime learning tax credits, is that correct? I just want to make sure just in case. Or any more info about this situation would be helpful!

Box 1 states 2,358.45. Box 2, 3 are empty. Box 4, 5, 6 all say $0.00. Also, boxes 7, 8, 9 are not checked and box 10 is empty. 

Sorry for the long info

Thanks!

[RaifH]

Yes, if your brother is not at least a half-time student as determined by the school, then he does not qualify for the American Opportunity Tax Credit and instead qualifies for the Lifetime Learning Tax Credit. If your parents are claiming him on their return, they would be the ones eligible to claim it by including your brother's 1098-T on their tax return. 

The credit is for 20% of your brother's qualified education expenses up to $10,000 of education expenses. Any fees, expenses, or supplies purchased directly from the education institution would also be considered qualified education expenses.

As long as your parents did not claim these expenses in the prior year, they would be able to claim them this year. 

[Hal_Al]

Why did he get a 2021 1098-T, if he did not attend school in 2021?  That's highly unusual.  If the $2358 payment was made, in 2021, for 2020 classes, it does not qualify for a tuition credit*.  Late payments don't count. So, no he cannot claim either the Lifetime Learning Credit (LLC) or the American Opportunity Credit (AOC).

If, somehow that $2358 does count for 2021, he should claim the AOC. He qualifies and it is much more generous.  If he is your parent's dependent, they should claim the AOC, not him. 

*If the payment was made in December 2020, but the school didn't post it, to his account, until 2021, that amount can be used to claim the credit on his (or the parent's) 2020 return (not 2021).

[cindyggarcia16]

Yes, the payments were made in 2021 for 2020 classes. 

I'm honestly not sure why they gave him it to be honest unless it's because they made the payments in 2021. 

However, when I'm filling out the taxes, it says he doesn't qualify for AOC but instead Lifetime Learning Credit LLC, I might not sure.

Yes, he's my parent's dependent. 

Yes, that's what I was thinking, since the $2358 does count for 2021 my parents should claim the AOC. 

The payments were made from April 2021 - to June 2021 but I guess it would be considered late payments then? 

Also thank you so much for responding to my question! I really appreciate it!

[ThomasM125]

Since he didn't attend school in 2021, no one can receive an education credit for this year.