Filing independent: 1098T Box 5 greater than Box 1

Forum|Forum|3 months ago
April 8, 2026
1 reply
86 views

Box 5 is greater than box 1 on 1098T as a graduate student (so the loophole doesn't work for me). I did not receive any of that "scholarship" money but it's taxing me since it's considered non-QTRE charges. Can I report the difference under optional materials if they were fees (ie Accident Insurance) required by the school?

AmyC

Level 15

Graduate students can use the loophole to claim the Lifetime Learning Credit. Increase the taxable income to leave room for tuition paid by you. Compare your results claiming different amounts of tuition paid and credit received against the change in income tax. A credit is a dollar for dollar reduction of your taxes while income is just a percentage change of tax liability. The IRS has a great brochure.

Fees:

To reduce the taxable portion of your scholarship (the amount where Box 5 exceeds Box 1), you can include expenses that weren't on your 1098-T only if they meet the IRS definition of Qualified Tuition and Related Expenses (QTRE).

Required Books and Supplies: For the Lifetime Learning Credit, these only count if they must be paid directly to the university as a condition of enrollment. If you bought them from an outside vendor (like Amazon), they generally do not count for the LLC.
Accident Insurance/Student Health Fees: Generally, no. The IRS is quite strict here. Even if the school requires you to have insurance, premiums and "student health fees" are specifically excluded from QTRE.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"