Since Chapter 35 benefits (not GI Bill) are not required to be used for educational purposes, do I have to claim them with my 1098-T?

[mhudgins1982]

Chapter 35 benefits are not paid directly to the education institution and there is no requirement to use them for educational purposes. They are not listed on the the 1098-T. When claiming the American Opportunity Tax Credit, do you still have to enter the amount you received or simply $0 since it is a tax-free benefit?

[Hal_Al · Accepted solution]

Q. Do I have to claim Chapter 35 benefits with my 1098-T?

A. No. Chapter 35, Dependent Educational Assistance (DEA) is a stipend-based program only. Therefore, no tuition and fees are covered.

Q.  Do you still have to enter the amount you received or simply $0 since it is a tax-free benefit?

A. Answer No, when asked if you received VA educational benefits.