1098-T When Tuition Charged vs When Tuition Paid

[cannonwilliams]

Hello,

I received my 2019 1098-T from my college. I graduated in Spring 2019, my final semester. The 2019 form reflects nothing in box 1 or 2 regarding tuition (different from evert 1098-T prior), however my tuition scholarship is still present. Given this, my refund takes a hit as without context it seems I have a lot of money from the university with no tuition being spent on.

However, in my actual student account where I paid my expenses, for Spring 2019 I can see a charge of the tuition as well as the credit from the tuition-only paying scholarship (as was the case each semester). They always cancel each other as they are posted at the same time each semester. I emailed my school account rep and they confirmed the tuition was charged in December 2018 but paid in January 2019.

Is this the situation where I check the box on Turbo Tax that says “this is not what I paid” and enter the tuition amount I paid? Or do I strictly upload the informational 1098-T and take the loss, as that box does not apply to me? I don’t want to submit this form incorrectly and have to sort out a wrong filing, but I also need help on uncovering the real and fair situation I file on.

[JotikaT2]

If the tuition was paid in 2018, it was picked up on your 2018 tax return.

Therefore, you would not be able to pick them up again in 2019.

If you had other expenses that you paid out of pocket which were directly related to your education, you can enter those expenses under the "Other Education Expenses (for all schools). 

This will show up as you enter your 1098-T information under the page titled "Here's Your Education Summary".

Scholarships can be taxable if they are used for the following items:

• Room & board
• Travel & incidental expenses
• Any fees, books & supplies not required for classes

 Scholarships are not taxable if used at an eligible school for a degree if:

• Tuition & fees
• Fees, books, supplies needed for classes
• Scholarship or fellowship for services from:
• National Health Services Corps Scholarship Program
• Armed Forces Health Professions Scholarship & Financial Assistance program

[cannonwilliams]

Thank you for your reply. The tuition was charged in December 2018, but paid in January 2019.

[cannonwilliams]

This is what my school told me: “Because your Spring 2019 semester was charged in 2018, those payments are reflected on your 2018 tax form. What we report is based on when you are billed rather than when you pay”

If I was also confirmed by the school to have paid in January 2019, the 1098-T itself is not wrong given the school reports on when billed so the first two boxes would be blank. But it is an informational form, so me being paying in 2019 wouldn’t be reflected and I have to clarify that. This isn’t a confusing situation, it’s just one I have no clarity on for what applies to my situation...

[KrisD15 · Accepted solution]

This is answered in your other post. 

Yes, definitely. 

Your school is wrong. They are mandated to report what was paid, not what was billed. 

Box 1 is what was paid in the tax year. If you paid in 2019, but the school did not report that in Box 1 of the 1098-T, you can use the link on the 1098-T screen and entered what was paid. (see screenshot posted above in thread)

Be sure to keep a copy of the statement that shows the payment was posted in 2019. 

Be sure to keep this copy with your tax file. 

According to the IRS:

“Box 1. Payments Received for Qualified Tuition and Related Expenses Enter the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year. The amount reported is the total amount of payments received less any reimbursements or refunds made during the calendar year that relate to the payments received for qualified tuition and related expenses during the same calendar year. The amount reported is not reduced by scholarships and grants reported in box 5. Include in this box the receipt of a payment of past-due qualified tuition or related expenses from a previous calendar year, but only if the educational institution previously billed the student for such amount(s).

Box 2. Reserved This box is reserved for future use.”

[robinb7]

I am having the same question.  My daughter received a 1098-T in 2018 which includes the tuition billed for the spring semester of 2019.  We did not receive a 1098-T for 2019 even though the tuition was actually paid in 2019.  Due to not receiving a 1098-T I am not entering any tuition paid for 2019 and losing the American Opportunity Credit for 2019. She has claimed this credit for 3 years and should be eligible for one more year.  However, I don't know if she qualifies for the exception?? If I click Yes to the exception and manually enter her tuition then we get the credit.  I don't want to do the wrong thing, but it feels we are entitled to the AOC for the 4th year. Any advice?  

[Hal_Al]

Just do it.

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 or that you qualify for an exception (you do; the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. 

[BILLBOOKMAN]

graduated in spring 2020  in Fall 2019 the school failed to refund 5400 an overpayment of Fall 2019 tuition.

Does that reduce the amount I paid for Spring 2020 tuition? IRS states"Box 1. Payments Received for Qualified Tuition and Related Expenses Enter the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year. The amount reported is the total amount of payments received less any reimbursements or refunds made during the calendar year that relate to the payments received for qualified tuition and related expenses during the same calendar"  Since the 5400 related to the 2019 calendar year can I increase the amount paid in 2020 by 5400 ?

[Hal_Al]

deleted

[BILLBOOKMAN]

Refund came  4/2020 - It was counted as a payment on 2019 1098-T - Would much prefer refiling  2019 reducing box 1 by 5400 (increases my taxes for 2019 by $2) not counting the refund in 2020 decreases my tax by $2041. Cannot find the best way to document in TurboTax Delux windows desktop any changes to the schools 1098-T

[Hal_Al]

Q. Does that reduce the amount I paid for Spring 2020 tuition?

A. No. Since it was not a reimbursement of any of the 2020 payments. 

Q. Since the 5400 related to the 2019 calendar year can I increase the amount paid in 2020 by 5400 ?

A.  No.  That doesn't even make sense.

Technically, if you are reimbursed for an amount you deducted in a previous year, you are required to treat the reimbursement as income in the current year. But you didn't really claim a deduction.

So, technically you made a mistake in calculating your 2019 credit and would need to file an amended 2019 tax return.  For $2, don't waste your time or the IRS's.

[BILLBOOKMAN]

2019 refund of $5400 for overpayment Fall 2019 Tuition was issued April 2020 - it reduced the amount paid for 2020 by $5400 creating a tax bill of $2100 instead of a $530 refund. I cannot find how to correct this issue in Turbotax Delux windows desktop. The supposed link under box ! on the 1098-t does not exist.

[Hal_Al]

I'm not following you. How did you enter the $5400 to start with?  Did the school include it in box 1?  If so, just change box 1 to what it should be, if you know it to be wrong.  The 1098-T you enter is not sent to the IRS. It is essentially a worksheet.

I have not heard of any problems with the link not being there.  I just check my software. It's there. But, changing box 1 does they same thing.

[BILLBOOKMAN]

School excluded the 5400 in box one; it is odd about the missing link. I will do as you suggested; there is a  +link that allows supporting details

Thanks!!!

[Hal_Al]

I'm still not clear (about what including or  excluding a negative number means).  My reply assumes the amount  in box  1 is $5400 less than what you paid, in 2020, and that is erroneous.