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Where do I input the tuition my son paid?

he has a 1098-T, and also paid some tuition
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1 Reply
Hal_Al
Level 15

Where do I input the tuition my son paid?

If you claim him as a dependent, you are the only one who can claim the tuition credit. You enter the 1098-T, on your tax return, not his, even though he paid some tuition.   You add the amount he paid to what you paid, when claiming the credit.  

 

You claim the tuition credit, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1.

 

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If you son's tuition was mostly covered by scholarship, there is a tax “loop hole” available. 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.

 

 

 

 

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