Triggering AOTC for student on full scholarhip

5 replies
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I have spoken with 3 people on the phone and still can't solve this.

My oldest received a full scholarship including room and board, and the Box 5 is about 10,000 more than Box 1 on his 1098-T. Last year it was more than that and there was no problem.

After I upload the document and answer the questions the same way I did for the past 3 years, I receive a message that he does not qualify because someone else can claim him as a dependent (tech support has reviewed and deleted and re-added him several times and there is NOTHING that says someone else will be claiming him.)

I know he has to allocate 4000 to income on his own tax return. I can't even get off the ground with mine.

My answers are

-Received a scholarship

-Full-time

-Not his first year

-AOTC claimed 3 years

-Received 1098-T (Uploaded and verified numbers)

-At least half time

-No employer, GI bill or veterans funds

-No 2024 1098T with Box 7 checked

-No other financial aid

-I've tried running the question about room and board both with the 4000 and without and it doesn't matter

Message:

It looks like XXXX doesn't qualify

Education credits

American Opportunity Credit and Lifetime Learning Credit

Here's why:

Somebody else can claim XXXX as a dependent on their return
There were no net qualified education expenses

The IRS says this is allowed so why doesn't Turbotax do it? The third person I spoke to was from expert and said the reason is the Box 5 exceeds Box 1 - which was true for a lot more last year, and also that does not matter the way I read IRS material.

I have about 10 hours into this one issue. Please help.

Edit: I'm looking for the workaround to allocate funds to taxable (I know I don't have the right words) as is done here. I just don't know what the numbers are for mine or where to enter them.

Solved: Education Credits and Excess Scholarship Funds

TurboTax Premier Online

ThomasM125

Alumni - Intuit

You would not normally qualify for an education credit if your scholarship income was more than your tuition expense. The reference to someone else claiming him as a dependent may just be telling you that is one reason he may not qualify, but the primary reason is the scholarship income paid for the tuition, so that portion of it is not taxable. So, you can't get an additional tax benefit by receiving an education credit.

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user17737503813Author

Level 2

Ok... So for the last year out of the 4 he reports the difference between those two amounts as taxable income, then unlike in previous years nobody takes the AOTC? He cannot as he is my dependent.

It still doesn't make sense that he is showing as "someone else can claim him" when 3 reps have checked that he is entered appropriately as a dependent.

MarilynG

Alumni - Intuit

Edit your Dependent student in the Personal Info section. If all appears correct, and you know you're not eligible for an Education Credit, you're not required to enter Form 1098-T into TurboTax, it is an informational document only. You can delete the form from your return and keep it for your records.

Any taxable scholarship income can be entered under Miscellaneous Income 1099-A, 1099-C > Other Reportable Income, although it is easier if you're able to enter it in the Education section and have TurboTax report the taxable scholarship income for you.

Have you tried deleting/re-entering him in the Personal Info section? Clear your Cache and Cookies after deleting, before re-entering?

@user17737503813

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