What if my son had a housing scholarship but it didn't cover the entire amount and he still had to get a student loan?

[mcbishop17]

I'm stuck on the question:  "Tell us if your son used a scholarship, grant, or fellowship to pay for room or board..."   

He did receive a housing scholarship, but it was only $1,000.00 and did not cover the entire cost of his housing.  So, do I only enter $1,000.00 as far as the total used even though he had to get student loans to cover the remaining amount for each semester?

[KrisD15]

Yes, the program only wants to know that the 1,000 was used on room and board. Scholarships used for room and board are taxable for the student. 

The excess room and board does not count for anything as far as credits, only tuition, fees, books and supplies count towards an education credit.  

Student loans are not deductible, but once you start paying them off, the interest will be. 

[mcbishop17]

Thanks for the response...here goes another question - 

Now my son is trying to figure out where to fill in the information on his taxes about the taxable housing scholarship.  

Does this just need to be listed under other earned income on his return?  (He worked last year & was filing anyway.  He just isn't sure where to fill in the $1,000.00 taxable scholarship information.)

[DMarkM1]

In accordance with Publication 970, taxable scholarships are entered on line 1 with identification "SCH".  To accomplish this in TurboTax.

1.  Click "Income & Expenses" tab at the top of page

2.  Scroll down to "Less common income"  

3.  Click "Show More"

4.  Scroll to "Miscellaneous Income..."

5.  Start/revisit

6.  "Other income not reported on W2 ..."  

7.  Start/revisit

8.  Answer "yes" and continue through to " enter source of other earned income"

9.  Select "other"

10. Enter "SCH" in the description and the amount in the box 

11. Done

[mcbishop17]

Well, my son said that he was prompted that he needed the TurboTax Deluxe edition because the TurboTax Free doesn't cover your situation.... 

Is there another way to work around this because he isn't getting that much back anyway & paying for another version doesn't make much sense does it?

[KrisD15]

He should be able to enter an amount as Scholarships in the Education section under Deductions a & Credits. 

He should start the education section, but say no to the 1098-T and only enter the scholarship amount he needs to claim.