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jdemata
New Member

Where should we report taxable scholarships and why are they asked for twice?

We have a taxable scholarship not included on 1098-T and have entered it on the miscellaneous wages section but then on the deductions we are asked again for scholarships non included on the 1098-T. Should we put the entire scholarship here or only the taxable portion again?
Thanks.
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1 Reply
HelenaC
New Member

Where should we report taxable scholarships and why are they asked for twice?

Remove the scholarship from the Misc Wages section. 

To enter scholarships, grants, stipends NOT INCLUDED on your Form 1098-T:

  • Type scholarships in the search box and click search.
  • Click on Jump to scholarships.
  • On the Your Education Expenses Summary screen, Edit the student.
  • On the Here's Your Education Summary screen, scroll down to Scholarships/Grants (for all schools).
  • Continue with the onscreen interview.

Generally, you pay income taxes on taxable scholarships and grants but not social security or Medicare taxes.

****Scholarship, fellowship, stipends or grant money, if not used for qualified education expenses is taxed as income and belongs on Form 1040 Line 7 with SCH in front of the line number.

Per IRS Publication 970 Tax Benefits for Education : Payment for services. In most cases, you must include in income the part of any scholarship or fellowship that represents payment for past, present, or future teaching, research, or other services. This applies even if all candidates for a degree must perform the services to receive the degree. 

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