Q. Where is TT's screen that allows you to adjust the scholarship amount for "amounts not awarded for 2021 expenses" ?
A. It's not included on the 1098-T screen where it lets you enter new box 1 amount. It's several screens later, in the scholarship section. It says "Did (student's name) aid not include amounts awarded for 2021 expenses?" It goes on to say "Sometimes schools will not report education expenses and corresponding scholarship income on the same year's form 1098-T. Learn More"
Learn More "Scholarship income must reduce qualified education expenses for each period of study that assistance is allocable to. However, sometimes scholarship income is not received at the same time education expenses were paid. This can cause your scholarship income to be overstated in one year and then understated in another year. If you received scholarships or grants in 2021 for expenses reported in a year other than the current year, enter an amount here to reduce your scholarship income amount. You will need to include that same amount as scholarship income in the tax year in which the education expenses are actually reported.
For example, in 2020 you received a 1098-T with $4,000 for your fall 2020 expenses which you reported on your 2020 tax return. In 2021 you received a 1098-T that included tuition expenses of $6,000 and $10,000 of scholarship income. $4,000 of the scholarship was actually for your 2020 expenses. You will enter $4,000 here to reduce your scholarship income to $6,000 for 2021. You may also need to recapture any education credit or deduction taken in 2020 that would have been disallowed in 2020 due to the additional $4,000 of scholarship income allocable to 2020 education expenses".
