What amount should I enter for the "Amount used to calculate Education Deduction or Credit?"

mahgallo · ‎June 6, 2019

Our son is a college sophomore and used a 529 plan to pay his expenses. The 1098-T form has $23,328 in box 1. The 529 plan also covered $2,386 for books and other fees. We will be filing a joint return and our AGI exceeds $180,000. What amount should I enter for the "Amount used to calculate Education Deduction or Credit?"

LinaJ2018 · ‎June 6, 2019

You would enter the difference between the 1098-T and 529 amount. ($23,328-$2386)

As the 529 plan distribution is used to cover the tuition amount from Form 1098-T, you would enter the difference as the amount allowed to calculate the education credit or deduction. If your income exceeds the limit, the program will calculate the phased out amount or you would completely lose the entire credit.

mahgallo · ‎June 6, 2019

TurboTaxLina, the $23k was sent directly from the 529 to the university for tuition. We covered the $2,386 for books/fees and then had the 529 account reimburse us. Since the books/fees aren't included on the 1098-T, is your answer still correct?

LinaJ2018 · ‎June 6, 2019

Yes, the most important is the amount used to calculate the credit. If only $2386 is paid by the 529 plan, the remaining portion is the number you enter for the software to calculate the education credit or deduction.