Here is how the 1098-T should be reported.
Box 1) TUITION AND FEES reports what the school received on behalf of the student. Does not matter who paid or where it came from, it's what the school received.
Box 5) SCHOLRSHIPS report the scholarships that were issued through the school for the benefit of the student.
Room and Board is not reported on the 1098-T.
The AMOUNT of scholarship in Box 5 can usually be allocated to tuition and fees, or room and board or a combination of both.
The amount allocated to room and board is taxable.
The amount allocated to tuition, fees, books and supplies (such as a required laptop) is not taxable.
Supplies and books are not normally included in Tuition and Fees, so that cost will also not be reported on a 1098-T. It is up to the student to keep track of expenses and outside financial assistance.
The amount of tuition, fees, supplies and books left over may be used to apply for an education credit.
If it wasn't paid to the school, or the scholarship did not go through the school, it won't be on the 1098-T
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