529/1099Q

[kirlinsc]

If the GI Bill is captured in the amount of the 1098T and I broke it out when asked do I need to put it in the 'Did XXXX receive a scholarship or grant in 2021' section also?  I checked 'Yes' and it asks again for 'Veterans Education Benefits'.  It lists the 1098T amount-the GI Bill as the 'Scholarship Amount' then gives a box under it for the 'Veterans Education'.  I assume this should be '0' for me since it was already captured in the 1098T.  So should I just select 'No' from the beginning for this section since she has no other scholarships that were not already reported previously?

And lastly, the section 'Did XXXX pay for room and board with a scholarship or grant'.  I put 0 since we can apply it to the 529 which is tax deductible.  In reality the money could come from any one of the sources to include the VA GI Bill.  

Thanks again!

[ThomasM125]

I believe you are referring to the screen that says Did (name) Receive a Scholarship or Grant in 2021? If you say "yes" you will note that TurboTax says Don't include amounts already listed on a W-2 or other tax form. So, you shouldn't add the scholarship income reported on your form 1098-T here.

You should enter the room and board expenses when asked, as they will be factored in when you complete the education savings account section in TurboTax.

[Hal_Al]

Q.   So should I just select 'No' from the beginning for this section since she has no other scholarships that were not already reported previously?

A. Yes,  That is,  do not duplicate the entries of educational assistance amounts.  If the GI bill $ are already include in box 5 of the 1098-T, do not enter it again at  'Did XXXX receive a scholarship or grant in 2021' section also?  

Q. In  the section 'Did XXXX pay for room and board with a scholarship or grant',  I put 0 since we can apply it to the 529 which is tax deductible.  In reality the money could come from any one of the sources to include the VA GI Bill.  

A.  Yes, that's the correct thing to do.  

There are three things you can do with your Qualified educational expenses (QEE):

1. Allocate then to scholarships (so that the scholarship remains tax free)
2. Use them to claim an education credit
3. Allocate them to the 529 distribution (1099-Q) so that it will not all be taxable

Sometimes you want to make some of the scholarship taxable, so you can use the money for the other 2 tax benefits.  That's when you would say some of the scholarship was used for R&B.  That does not appear to be your case.  You do not have that flexibility with GI Bill tuition money.