I am a grad student TA who receives tuition remission & a per-hour salary from my uni. The remission is in the 1098-t. Is the remission taxable & how should I report it?

[akshay87]

I am a grad student TA who receives tuition remission & a per-hour salary from my uni. The salary is reported on my W-2. The remission is in the 1098-t and makes up the total amount of Box 5. 1st, I am not sure whether the remission counts as part of the total W-2 money or not. 2nd, I am not sure how to report the remission. It seems to me that it is not taxable, since I don't receive the money, but it is pure and the amount in Box 5 is lower than the amount in Box 1 (which contains payments I made to the university per year, which I believe includes all the money in Box 5 plus some additional fees I have to cover on my own).

Is the remission taxable & how should I report it either way?

[Cindy0H · Accepted solution]

Since you are a grad student, you will be eligible for a Lifetime Learning Credit. Your salary is taxable, your remission is not as long as it was not used for room & board.

You will be entering the 1098T as it is written. Here are some questions you will want to answer:

Was Any of XXXX's Financial Aid Already Included in Income? NO (your W2 is really a salary)

Did XXX Receive a Scholarship or Grant in 2018? YES

Did XXX's Aid Include Amounts Not Awarded for 2018 Expenses? NO

Did XXX Pay for Room and Board with a Scholarship or Grant? You will have to answer this but you should know:

A scholarship or fellowship is tax free only if:
  • you are a candidate for a degree at an eligible educational institution and
  • you use the scholarship to pay qualified education expenses.

Expenses that Don't Qualify
Qualified education expenses do not include the cost of:
  • Room and board.

[akshay87]

Thanks for the reply. One issue I am not sure about is that it does appear that I am taxed on my remission (since my refund drops significantly when I say that it is not part of the amount listed on my W-2 as opposed to when I say that it is part of the W-2 amount). I am not sure how to guarantee that I am not taxed for this amount, since, as you say, it should not be taxable given that it is not used for room and board.

[Cindy0H]

This is the correct way to do this.