Received American opportunity college credit for tuition not paid

[johnsdm619]

In 2016 my son was a freshman attending a state university on a National Merit scholarship which pays his full tuition.  However, because of billing timing he was billed for 2 semesters of tuition in 2016 but only half of his scholarship had been credited as of December 31, 2016.  This discrepancy appears on his 1098-T where the tuition ($27k) and scholarship ($14k) figures do not match.  When I enter this information into Turbo Tax, it assumes that I paid the tuition not covered by the scholarship, which I did NOT.  The other half of my son's scholarship paid the remainder in January 2017.  So, there are two issues:

1. TurboTax is awarding me the AOTC for tuition I did not pay.  How do I tell TurboTax I did not pay it?

2. I did pay for various fees, books and supplies for him which I would like receive credit .  TurboTax is not giving me credit for these expenses.  I think AOTC should cover this.

Any help would be appreciated!

-D.J.

[MiriamF · Accepted solution]

You can enter the spring semester scholarship on the Here's Your Education Summary page under Scholarships and Grants (for all schools). But we don't recommend it.

The instructions for form 8863 say that you should enter only the amount you actually paid. Because the school will be reporting the spring semester scholarship on next year's form 1098-T, you will be better off reducing the amount paid than augmenting the scholarship amount.

When you fill out form 1098-T in TurboTax, below Box 2. Amounts billed for tuition, you will see a sentence in blue, What if this is not what [the student] paid to this school? Click on that link, and you will be able to enter the amount actually paid. You should then be able to get credit for the books and supplies.

Follow this link for the complete form 8863 instructions.