Hi there, trying to understand the right way to file via TT. My daughter received a 1098T from her school. Box 1 reports that she paid $6025. Box 5 reports a scholarship amount of $3000. So 3000 of the 6025 was paid with the scholarship. The remaining 3025 was paid using 529 funds.
TT seems to be assuming that she paid 3025 and is therefore eligible for education credits, both from the IRS and the State. However my understanding is that if the box 1 remaining funds after subtracting the scholarship is paid using tax-free 529 funds, she cannot receive education credits because the money used to pay for her education is already tax-free.
What is the right approach here? Do I need to somehow adjust TT so that she does not get the education credits? If yes, how/where do I do that?
Thank you!
