If your parent works at the college and a tuition waiver is given, does that amount count as income? The school filled out a 1098-T saying I had a huge scholarship because the waiver covers tuition, room and board. I never received a cent, but tuition and books and fees only takes a small part of that amount. The rest seems to be showing up as my taxable income. Since my parents claim me as a dependent, I end up owing several hundred dollars. Am I doing something wrong?
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No, you are not doing anything wrong. This would be correct. If your parents work at the college, the tuition waiver is treated as a scholarship. This means any amount (even though you never had it in your hand) used for anything not used for eligible education expense becomes taxable income to you.
Basically, the room and board, are not qualified education expenses and the amount that was used to cover those expenses became taxable income. This means, depending on how much you received that wasn't used for qualified education expenses, how much other income you have and possibly your parents income tax rate if you are subject to the kiddie tax, you could owe a few hundred dollars.
Taxes for Grads: Do Scholarships Count as Taxable Income?
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