@LinaJ2020 I'm confused by your response since this doesn't clarify how to separate the money that shows in both forms.
I do know that " the difference would be treated as a taxable event as wages" on the 1098T. But I'm going to try to explain again the problem with some random numbers to make it more clear.
On my 1098T I have:
Box 1 "$100"
Box 5 "$300"
On Box 5 the breakdown would be
- 100 that are from box 1
- 100 that are from a stipend. This 100 are a result of a stipend that had taxes deducted. (**)
- 100 a health insurance benefit that
Now on my 1042S it shows:
Box 1 Income code: 16
Box 2 gross income: 120 (which is the amount that shows on 1098T see (**) plus taxes that withheld)
Box 4a Exemption code: 16
Box 7a Federal Tax withheld: 20
Your answer would be valid if the stipend part of box 5 in 1098T was the full amount of what shows in Box 2 of 1042S but unfortunately it is not.
Would it be ok if (following the example numbers I show)
- Modify the entry of the 1098T Box 5 by subtracting the stipend paid with tax withheld. (Is this ok?)
- Enter what is in box 2 of 1042S as a separate scholarship in the "Did you received other scholarship ? part"
- And report the money withheld on the 1042 S Box 10 on "Federal Withholdings" box of the "Other Income Taxes Paid in 2018."
