My son is a Freshman at a Florida University. He has Florida Prepaid tuition and 100% Bright Futures. He received a 1099-Q for the prepaid tuition and he received a 1098-T for the BrightFutures scholarship. Between the prepaid tuition and Bright Futures those paid for all of his tuition and housing. We took out a separate loan to pay for his books, food, and other misc expenses that came up.
I am claiming him as a dependent on my 2019 taxes. He had a part time job and will be submitting his taxes to cover what he earned last year.
On his 1098-T box 1 was greater than box 5. (box 5 matched what he received for the scholarship) box one was for qualified education expenses. I was assuming that the difference between box 5 and box 1 would be considered as taxable income.
I tried a 2 things:
1.)In the screens that handle the 1098-T form I took the difference between box 1 and box 5 and considered as income used towards housing (not qualifying educational expenses)...then turbo tax told me my son had to add the same amount on his form as income. I did that on his taxes. Doing this increased my tax refund by $335 but didn't changes his.
2.) The 2nd thing I did was consider my whole bright future scholarship $3,490 as being used for housing (non qualifying education expenses). Again here Turbo Tax told me the my son had to add the same 3,490 to his taxes. Doing this increase my tax refund by $2,100 but didn't change his. Doing it this way makes more sense since my Prepaid tuition would have paid for all his tuition and the bright futures would have paid for all this housing. (even though the 1098-T box 1 and box 5 didn't reflect that)
The 2nd way take more advantage of the AOC.
Am I right in how i did the 2nd attempt above?
