Where do I add my 1098t

[karsynbmathis]

how do I add my 1098t to taxes

[MinhT1]

Form 1098-T reports tuition you paid to a qualified educational institution and the scholarships you received during 2023. You have to enter it on your tax return to claim education credits such as the American Opportunity tax credit or the Lifetime Learning.

To enter your form 1098-T in TurboTax Online, follow these steps:

1. Open your tax return
2. Click on Federal in the left panel.
3. Click on Deductions & Credits
4. Locate the Education section and click the arrow on the right
5. Select Start next to Expenses and Scholarships (Form 1098-T) 
6. On the next page, click on Add a Student. Or if the student has already been added, click on Edit next to the name of the student. After a few screens, answer Yes on the page Did [student] get a 1098-T for the year 2023? 

@karsynbmathis

[Edited 02/14/24 | 12:37 PM PST]

[Hal_Al]

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly the student has taxable scholarship income. 

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

If the student is a dependent, then the parent is usually the one to enter the 1098-T, on their tax return, to claim the tuition credit.  If the student is declaring taxable scholarship, then the student enters the 1098-T. So, there could be circumstances where both the student and the parent enter the 1098-T, with adjustments. 

[Hal_Al]

There is even a tax “loop hole” available, for those on scholarship. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.

Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $5000 of taxable scholarship income, instead of $6000.