Yes
School years and tax years can overlap which is why schools are supposed to report what was PAID in Box 1.
You might want to compare the 1098-T with the student's school account statement.
Match the numbers for the tax year.
Claim what was PAID in the tax year.
If you know a scholarship will post in 2022 for the cost of the first three months of 2022 you can adjust one of two ways.
If the cost or amount paid by the scholarship is included on the 2022 1098-T, just match it on next year's return.
If the cost is included on the 2021 1098-T, apply it to 2021 and adjust for the scholarship next year.
But I am a bit confused as well.
IF you paid for 2022 classes (which is fine, you can claim what was paid in 2021 for classes attended in 2021 and/or the first three months of 2022) why is Box 1 on the 1098-T low? Box 1 should report what was paid to the school in 2022, so it should reflect ALL your payments.
Box 5 reports Scholarships passed through the school, so that might look low if you are comparing tuition paid with scholarships received, and the scholarship won't be received until 2022.
Hopefully this is the student's first year and you can match the payments with expenses before it gets out-of-hand.
Remember, you can pay for classes attended that tax year and/or the first three months of the next year.
(you can only pre-pay 3 months ahead)
Expenses paid can ONLY be applied to an education credit for that same year.
(if you pay in December 2021, it is applied to 2021, if paid Jan 2022, it is applied to 2022)
If you know a scholarship will post the next year for expenses posted on the 1098-T this year (Box 1), adjust for that scholarship by adding it to this years return and subtract it from next years. (Scholarship MAY be moved from one year to the next)
Education Credits are based on MORE EXPENSES THAN TAX-FREE ASSISTANCE such as scholarships.
If there is more scholarship than expenses (or you use expenses for a credit rather than applying to a scholarship) there may be taxable income in which case the income is claimed by the student.
IRS Pub 970 is a very good resource and might be worth looking at.
Pub 970
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