Hal_Al
Level 15

Education

@LELM 

Q. Should I do our tax filings differently to get some advantage of tax credit on education?

A. No.  Yours is right. His may need to be done differently, but to pay more tax, not get a tax break.

 

You did your tax return correctly.  The 1099-Q does not  need to be reported, as the distribution was covered by qualified expenses (room & board). You do not qualify for a education credit (income too high) so you do not enter the 1098-T, on your return.

 

While room & board (R&B) are qualified expenses for a 529 plan distribution, R&B are not qualified for  tax free scholarship (or a tuition credit). So,  $1000 of the scholarship may have to  be reported as income on the student's return. However if "other school expense" include  book and computer expenses, or fees not shown in box 1 of the 1098-T, he may reduce the $1000 by those costs.