Q. In TurboTax (TT) when I fill out the 1098-T on my taxes, it specifically tells me that my son has to file a tax return to include the extra money as income. This would necessitate HIM using the 1098-T form as to where the income came from. Is that right?
A. Yes. But, that does not prohibit you from also using it on your tax return, to claim the tuition credit.
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. And, sometimes, as in your case, both.
If you claim the tuition credit, you do need to report that you got one, so you must enter it on your return.
Entering the 1098-T is the easiest way for the student to report taxable scholarship. So, he should also enter it.
The TT interview is capable of handling this situation. But it can get complicated. If you find it easier, just change the numbers in boxes 1& 5 to adjust for what your calculations indicate. The 1098-T that you enter in TT is not sent to the IRS.
