unalthorized withdrawl from college

Forum|Forum|6 years ago
February 11, 2020
3 replies
23 views

My grandson enrolled in college in August of 2019 and received grants and scholarships and did have to pay a nominal amount by check in order to complete the enrollment. He apparently decided he was not going to attend classes and received a letter from the university stating that he is considered unofficially withdrawn from the university . He did receive a 1098-T with a dollar amount $6,228.56 in box 1 and an amount of $6490.00 in box 5. How do I enter this information appropriately in the data field for education or can we not enter it at all since I would not think he would have any eligibility for any Education Credit.

Thank you

Best answer by NCperson

@mcd525 - since Box 5 is greater than Box 1, it needs to be reported by the student...not yours'.

the difference is taxable income to the student.

If he is not required to file a tax return (i.e. no other income), then the 1098-T can just go in a drawer - there is no need to report it anywhere.

Carl

Level 11

The 1098-T still needs to be reported. Especially if the school paid out any of the money directly to the student. They may have, but I seriously doubt it. If they did, then it's the student and not the parent that reports the 1098-T on their own return.

But here's the bottom line as to why the 1098-T will still be reported.

WHen it comes to ***TAXES**** and your tax return

- There is "NO" requirement for the student to actually attend a class. Not one single class for one single day. The requirement is that the student be *ENROLLED* as a full time student for any one semester that starts in the tax year.

- There is no requirement for the student to pass a course. As stated above, they are only required to be "ENROLLED".

- There is no requirement for a student to actually be enrolled for an entire semester. The requirement is that the student be enrolled "as a full time student" for any one semester that starts in the tax year. There is no requirement for them to remain enrolled for the entire semester.

All the above is true based on my detailed reading of IRS Publication 970 about 7-8 years ago. I quick perusal of the document for 2019 indicates nothing that would change my comments thus far in this post.