Does 1099-Q and 1098-T need to be entered in Parent or Child or both ?

[gnk979]

Situation is that I am filing a joint return with my spouse and college going son as “dependent”. I have got 1099-Q and 1098-T forms with my son’s SSN.

I enter all the 1099-Q forms and 1098-T forms in Turbotax Deluxe on the joint return.  I get credit of Child tax credit $500 for my son and $2500 American Opportunity Tax Credit – this is after showing $4000 of the portion from Coverdell ESA as taxable (to get the $2500 credit). All the portion of the Coverdell ESA and State Tuition Plan (MET) are qualified expenses.

Turbotax then asks me to file a return for my son for the Scholarship amount as Unearned Income. I prepare a return for my son and the answer to “can someone claim you as a dependent” and I answer “yes”.  Do I need to enter all the 1099-Q and 1098-T forms again in my son’s return? The American Opportunity Tax Credit is already claimed in our joint return…

Where do I enter the Unearned Income in my son’s return? The form 8615 in the forms view shows in red caps as “DO NOT FILE”.  So not sure what that is…

Any guidance? Thanks..

[NCperson]

for the 1098T - assuming Box 1 exceeds Box 5, this goes ONLY on your tax return. your son is not eligible for AOTC  since he is your dependent. 

for the 1099Q, whose social security number is on the form? THAT is who is responsible for reporting any income.  (but there may be no need to report it)

however, I am a little confused by the 'unearned income' comment.

Can you please post these numbers and we can straighten this out.  There may be no need to report the 1099Q at all - depends on the numbers. 

1) 1098T - Box 1 and Box 5 

2) any other expenses not reported in Box 1 (e.g. room and board, computer expenses, books not required for class, books purchased that are required for class but not purchased at the school, anything else?) 

1099Q - Box 1 and Box 2 

who's social security number is on the 1099Q - parent or son? 

the goal is for 1098T / Box 1 - Box 5 + item 2) to exceed 1099Q / Box 1.

[gnk979]

The 1099-Qs and 1098-T have my son's SSN. There is scholarship that he received which was not used for tution hence it is taxable (unearned income).

1098T Box 1 is $10,000 (College changed reporting so it shows only 1 semester), I had to enter the amount actually paid as $20,000 in Turbotax screen. Box 5 has $1,000

1st 1099-Q for State tution plan Box 1 $20,000, Box 2 $15,000 - this is paid directly by the State Tution plan to the College.

2nd 1099-Q is Coverdell ESA and Box 1 is $10,000, Box 2 is empty. This is for room and board which is a qualified expense for ESA.

My son also had scholarship on 1098-T for 2018 - a part of which was for 2019.  So this is $1000 from Box 5 for 2019 plus $3,000 from last year's portion. Since this was not used for tution (as the state tution plan pays fully), this is taxable and TurboTax tell us to file a return for $4000 for my son. 

So, Do I need to enter all the 1099-Q and 1098-T forms again in my son’s return (although it is entered in my joint return with my son as a dependent?  and the American Opportunity Tax Credit is already claimed in it)

The Tution expense of $20,000 is offset by the $20,000 from the state tution plan and $10,000 from Coverdell ESA is offset by Room and Boading expenses. We had to make $4000 from expenses as taxable to get the $2500 American Opportunity tax credit.

[gnk979]

I also do not agree that my son is not eligible for the AOTC.

[Carl]

The 1099-Q is reported on the tax return of the recipient's SSN on that 1099-Q. You don't have a choice on that, and there are no exceptions.

[NCperson]

okay, let me summarize to be sure I have this correct

1) your son is your dependent

2) On the 1098T, Box 1 is  $20,000 and Box 5 is $4,000

3) on the sum of the two 1099Qs, Box 1 is $30,000 and Box 2 is $15,000

A) since your son is your dependent, the 1098T must go on YOUR return.  YOU are eligible for AOTC; he is not.  Dependents are never eligible for AOTC.   Once you post the 1098T, you should see the AOTC credit. 

B) the net expense on the 1098T is $16,000 (Box 1 - Box 5).  Of that $4,000 is consumed to get the AOTC credit of $2500 (IRS math, look at form 8962 for details), leaving $12,000 of net expense

C) The 1st 1099Q that went straight to the school should list your son's social security number.  What about the 2nd one, whose social security number is on there (for the moment, let's assume your son's).

D) The 1099Q distributions were for $30,000 (Box 1) and there is still $12,000 of expense from B) remaining.  That means you'll need to document $18,000 of expenses that are NOT on the 1098T to justify the distributions. 

E)  Room and Board is $10,000.  How much was books that were not included in the 1098T? how much were computer expenses?  What does all that add up to? If it adds up to at least $18,000, then there is no need for your son to report the 1099Q on HIS tax return.  Just make good notes to document how everything adds together and store away in case the IRS ever comes knocking.  If it all does NOT add up to $18,000, then the difference remaining is taxable TO YOUR SON (because I assume his social security number is on both 1099Qs) and must go on his tax return (*).  But not to worry, if his income is low enough (below $12,200), there is no tax to be paid in any event.

(*) when I mean the rest is taxable, I mean a percent of Box 2.  Let's say you only have $15,000 of expenses, subtracting from $18,000 which means $3,000 of the distribution of $30,000 wasn't required.  Since 10% wasn't required, then 10% of the Box 2 earnings of $15,000 or $1500 is taxable on your son's tax return.

any questions?

[ageorge7689]

These forms are so confusing. Here's my situation.

My daughter is a full-time student.  She gave me her 1098 T and 1099 Q forms - we're claiming her on our taxes.

I was told by TT that both of those forms go on OUR  return for that reason. When I was entering the info from 1098 T and 1098 Q  I got a message that said our daughter would have to pay taxes on something (sorry, I can't recall which form generated that message.) My return has been submitted, and I've rec'vd our refund.

Now I'm working on her return.  Do I have to report either of those forms on HER return?  If it helps, here's the info from those forms:

Her SS# is on both forms

1098 T - $26,025 (box 1) $19,000 (box 5)

1099 Q - $4500 (box1) $1895 (box 2) $2605 (box 3) 

[AmyC]

@ageorge7689  Well, you reported yours already and I don't know what you reported but this is what I would do for the returns.

1099-Q - all towards room and board, not reported on any return since clearly less than actual room and board. Unless living at home, then probably pretty close. If reported, it should have nothing taxed.

1098-T -Box 1 bigger than box 5 which means AOTC credit on parents return, if income qualifies. Nothing taxable to student.

Student has nothing to report or pay taxes on.