Q. To confirm, if the dependent is to file and their AGI Is still be under the requirement, they are technically not required to file even though there is a 1098-T?
A. Yes. The 1098-T is only an informational document. The numbers on it are not required to be entered onto your or the student's 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 (the TurboTax interview will handle this). What you enter is not sent to the IRS.
Q. I keep thinking of there being an issue of not reporting the additional numbers that are not accounted for in the parents return.
A. Even if you entered it in TT, it would not be sent to the IRS. Only the bottom line(s). What you claim for the credit goes on form 8863. What he claims, as income, goes on line 8r of Schedule 1. So far, I have not seen a single report, in this forum, of the IRS questioning the use of the scholarship income loop hole.
