Should I report 1098-T if I didn't pay for tuition myself (my parents did and they're filing separately)?

[melodyc977]

My parents paid for my tuition and fees listed on the Form 1098-T and they are filing separately from me. So I do I need to include it in my tax return since it didn't come out of my pocket?

[TaxGuyBill]

They are filing separately, but are they claiming you as a dependent?

[melodyc977]

Yes, they are claiming me as a dependent.

[TaxGuyBill]

Because your parents are claiming you as a dependent, the 1098-T should usually be reported on your parents' tax return.

The exception to that is if the scholarship/grants (Box 5 of the 1098-T) is larger than the tuition and fee paid (Box 1 of the 1098-T, plus any other qualified expenses not on the 1098-T). In that case, you need to report the excess scholarships as taxable income.  There is also a 'trick' that you and your parents can potentially do to qualify for a credit, but I won't get into that here (you may consider a tax professional for that).