My daughter received a 1098-T from her college, which effectively reduces the price of her tuition. This is NOT an outside scholarship being paid to the school. The amount included in Line 1 ($8565) appears to be the payments we made for Fall 2020 minus her room and board plus amounts we paid for Spring 2021 minus her room and board. (It's a little lower than what I paid, but I suspect some school fees are not considered as QEE for the 1098T form. Line 5 = $4823 and line 8 - half-time student is checked. There is nothing in lines 204,6,7.
For both semesters, I paid a total of $8763 (not including Room and Board), even though the cost of school would have been $4823 more for each semester. (Note that the scholarship on line 5 only reflected Fall 2020, not spring 2021).
In addition I have added 6300 room and board for both semesters, since I paid it all in 2020, and $636 for a computer.
On the Student Worksheet section 6 Line 13 is $15501 ($8565+6300+636)
I plan to take the AOTC, so to calculate my 529 plan, I would deduct that, so I expect line 19 Total adjustments to say $11501 ($15501-$4000). But instead, it also took off the $4832 on line 15 Tax-free assistance. Now the total is $[social security number removed]=$6669 that I can use as QEE for my 529. But I do not think the $4832 should be deducted, because the $15501 is my ACTUAL payment total to the school (except for the computer) and does not include the scholarship. If we had not gotten the $4832 scholarship, then her tuition payment would have been $8763+4832+4832=$18427.
I would expect that my QEE would be:
[1098TLine 1] + [Room and Board] + [computer] - [AOTC]
8565+6300+636-4000=$11501.
Had this been an outside scholarship, I would have expected that amount to be added to Line 1 on the 1098T form as a form of payment. But since the scholarship is not included in Line 1, and effectively is NOT considered a payment, I would expect it to be ignored and not used to adjust the 529 QEE.
Any thoughts?
