Do you need to account for the yellow ribbon program as a scholarship for college tuition?

[joseph-burger]

I have a 1098-T but the scholarship $ in box 5 is less than the total Post 9-11 GI bill   yellow ribbon $

[ThomasM125]

You don't need to account for your Post GI bill education assistance. Your GI bill education benefits are not taxable, so you should just report the amount in box 5 on your form 1098-T. 

[Hal_Al]

Q.  Do you need to account for the yellow ribbon program as a scholarship for college tuition?

A. Yes.  You may not claim the tuition credit based on tuition paid by GI/Veterans Benefits.  So, if box 5 does not include some of your  benefits, you need to tell TurboTax (TT) that you received that. After entering the 1098-T, TT will ask if you had any other assistance (employer, GI, other grants).

As I understand the "Yellow ribbon" program, the school gives you a scholarship and the VA matches that amount.  The box 5 amount is probably only the amount the school provided and does not include the GI bill part. 

[Meeshy312]

Why are the institutions putting the amounts received from GI Bill and Yellow Ribbon in Block 5 if they are NOT taxable?  There should be a separate box for VA benefits.

[Hal_Al]

Q. Why are the institutions putting the amounts received from GI Bill and Yellow Ribbon in Block 5 if they are NOT taxable?  

A. You'll have to ask the school that question. In my opinion it's part they don't know any better and part they think they're being helpful.  Note the original poster's confusion because it wasn't in box 5. 

For most people it's not really "wrong", if box 1 is more than box 5 by more than $4000. 

[Meeshy312]

I did and they sent a document that says that is where they are told to put it (Post 9/11) So when you put it through the TT system it looks like overpayments that are taxable?  Because it made block 5 more than block 1 - I think the school is doing some weird billing and scholarship stuff - but hard to tell because I can’t make sense of the invoice - dates out of order and such.  

[Hal_Al]

If you have both school scholarship and VA benefits, in box 5, you must first apply the VA benefits to the tuition in box 1.  That means, it's usually only the school scholarship that is being taxed, not the VA benefits. 

If the combination of the two is so larger, that the VA  benefits get taxed, then yes, you are going to have to do an override to the 1098-T. 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly your student has taxable scholarship income. 

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (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. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2024 expenses".

Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.