Reporting of fellowship income with 1098-T Box 7 checked

[computeraddict]

My 2020 1098-T reports amount X in Box 5. This includes amount Y disbursed to me in January 2021 for an academic period beginning January - March 2021. Box 7 of my 2020 1098-T is checked. 

Question: On my tax return for 2020, do I report amount X or X - Y? 

Thank you for your help. 

[Hal_Al · Accepted solution]

X-Y.

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 deduction 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 2020 expenses".

But that money will need to be accounted for on your 2021 tax return, unless was only reimbursement for expenses paid in 2020.