Phi1
Level 1

Help with filing 2020 tax. Form 1098T

I am 29 yrs old, a full time student and collecting unemployment benefits due to covid. I received $12,735 for unemployment. I have never received AOTC before and will be my first time. My school was not require to send me a 1098t since my Pell grant cover all my expense. My 1098t form show in box 1 $3,120 and in box 5 show $6,271.  I use remaining  refund of $3,151 for books, laptop and other supplies that the class require. Should I claim some amount of my Pell grant as taxable income and how much should I add to my income? 

 

 

Hal_Al
Level 15

Education

Q.  Should I claim some amount of my Pell grant as taxable income?

A. Yes

Q. How much should I add to my income? 

A. $4000.  The amount of qualified expenses  needed to claim the  maximum AOTC.

 

Be sure your parents didn't claim the AOTC or Hope Credit 4 timers back when you were their dependent.  The times they used it, on your education counts against your allowable 4 times.

In the TurboTax (TT) interview, you will be asked how much of the scholarship was used for room & board. Answer $4000. That's how you make it taxable, by stating how much was used for non qualified expenses. 

 

If you spent more than $3151  for books, laptop, and other required course materials, you can reduce the $4000 you need to have taxed.  But, it probably doesn't matter.  Your income is low enough that any amount will most likely reduce your tax to 0.  You should get the $1000 refundable portion as your refund.

 

 

 

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Phi1
Level 1

Education

Thank you so much for your help.