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Level 5

Solved

Full Scholarship TAX return

Forum|Forum|6 years ago
January 24, 2020
1 reply
0 views

Hello,

I did not find information about this matter in the knowledge base, so please excuse me.

My daughter received full scholarship - FAFSA aid through Pell Grant and Cal Grant and University gave her "free" residence through its own scholarship. And this scholarship turned out to be even more the cost of the residency, so they paid her $900 in cash to her bank account plus $500 of private scholarship from Award Fund. Some money was spent on books and motebook, about $2000.

I have read the tones of articles about the taxes in the case of education scholarships, and still do not understand which tax return all this information, including pending 1099-T form, goes to? According to what I read it goes to my return because she is my dependent, but from another info it goes to her tax return because it is the full scholarship, I will not have any credits for it and it does make any sense to put it to my tax return.

Plus the residency, room and board, part of the aid is taxable and should go to daughter's TAX return.

So I am overall confused.

Thanks!

Best answer by JotikaT2

You will report the 1098-T tuition on your tax return and enter any applicable scholarships as part of your entries into the program.

Go to the Federal section.
Click on Deductions & Credits
Select the Education tab
Select Tuition and proceed to answer the questions.

Scholarships are taxable if 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 used for:

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

Help for when scholarships are taxable vs. not taxable

The excess of the scholarship income over the actual allowed education expenses would be reported on your daughter's return as scholarship income.

However, she would need to meet the filing requirements threshold to determine if she even needs to file a return.

Please see the following to help you determine if she needs to file a tax return.

Gross income amount for dependents

JotikaT2

Answer

Employee Tax Expert

You will report the 1098-T tuition on your tax return and enter any applicable scholarships as part of your entries into the program.

Go to the Federal section.
Click on Deductions & Credits
Select the Education tab
Select Tuition and proceed to answer the questions.

Scholarships are taxable if 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 used for:

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

Help for when scholarships are taxable vs. not taxable

The excess of the scholarship income over the actual allowed education expenses would be reported on your daughter's return as scholarship income.

However, she would need to meet the filing requirements threshold to determine if she even needs to file a return.

Please see the following to help you determine if she needs to file a tax return.

Gross income amount for dependents

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StingerAlexAuthor

Level 5

Zillions thanks! You are so great!

May I ask you the question if I have some problems upon receiving 1099-T?

KrisD15

Level 15

Thanks!

Kris, may I ask you - have you seen my post about what I finally did? Any problems? Am I correct interpreting your guidance? I need your final approval before sending my return to authorities.

@StingerAlex

As David says, and I tried to make clear,

the 1098-T DOES NOT GET ENTERED a second time on the student's return.

Enter the 1098-T in your program, then follow the directions your program tells you in regards to what the student needs to claim, if anything.

On her return:

YES- 1.Put her W2 because it is more then $400 of earned income.

NO- 2. Put 1098_T with all original numbers.

Enter any income your program told you to enter for the student

Do not enter the 1098-T in the student's tax program

Just enter the "additional scholarship" that your program told you to enter on her tax return

I used the excellent KrisD15 guidance:

1. If the student is your dependent, you enter all the forms (1098-T, 1099-Q) in your program so that TurboTax can do the math.

2. answered above

3. Yes, if you enter the 1098-T you enter ALL the expenses, books and all, room and board too.

Once you're done, your TurboTax program will issue instructions about what the student needs to claim (if anything)

The student may never need to enter the 1098-t on their return even if they need to file

4. Right, again, you enter it (the additional scholarships) so TurboTax can do the math, but if they are taxable, TurboTax will tell YOU in YOUR program that the student needs to file.

Yes, just enter the income she needs to report as scholarship income (and her other tax documents of course)

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