My son is doing an internship during this 2021 Spring semester which has caused his Form 1098-T Box 5 (Scholarships or Grants) to be greater than Box 1 (Payments received for Tuition). The University explained how the IRS requires the boxes to be completed. Box 5 is based on the calendar year which means all (both semesters) of his scholarships for 2020 appeared in the box while only the Fall semester tuition appeared in Box 1. Normally what we would have paid for the 2021 Spring semester would have appeared in Box 1 but since he is doing an internship, we did not have to pay.
Since scholarships are greater than expenses, it is considering this unearned income for my son on his taxes and does not allow us to use the education tax break. Is there anyway around this that I am missing? I believe the answer is no but wanted to check to make sure before we completed filing his taxes.
Thanks!
