1098 T for Graduate Student on Stipend

Forum|Forum|4 months ago
March 23, 2026
1 reply
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My daughter is a graduate student on stipend. She receives a 1098 T that includes Tuition paid and Grant/Scholarship distributed. Turbotax takes the full Grant/Scholarship distribution, substracts the tax-free tuition paid, and uses the result as taxable income. This amount of taxable income IS NOT in line with what she actually receives as a stipend, and is overstating the income by about 15%, therefore overstating the tax due. In past years, she was advised (by the University CPA service) to just use the amount she actually received from the University as Income, and not the number presented on the 1098-T. Does anyone have any experience with this?

Thanks in advance

Hal_Al

Level 15

Yes, you can do that.

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 your 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.

You claim the tuition credit, or report scholarship income, 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. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2025 expenses".

Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.

But, that begs the question, why do you think it's overstated. How and why would the school make such a mistake. The more likely explanation is that the 15% is other scholarship, in addition to the stipend.

rjabaraAuthor

Level 3

Thanks. The only known item is the amount of money deposited into her account for the full year. The calculation of Grant minus Tuition Paid=Income on the 1098 T (calculated by the University) does not match this number and is overstated by 15% (also pushes into higher tax bracket)

If I want to adjust it to be the actual income received, how would I do that? The only options are to change how much I paid in Tuition (which I do not know as it is University Calculated) and Grants awarded (again calculated by the University).

This has been a known problem with these statements, but I just don't know which number to manipulate to get to the correct number. She is not getting the Education credit.

Thanks.

Hal_Al

Level 15

Q. If I want to adjust it to be the actual income received, how would I do that?

A. The simple thing is enter the 1098-T with 0 in box 1 and the net reportable income in box 5.

That said, you really haven't provided any info that indicates that the 1098-T isn't correct (you don't know how tuition & Grants are calculated by the University, but you know the bottom line is wrong? The 15% could have been applied to expenses rather than deposited to her account.