Situation: Dependent son is in first year of college, full time, toward a degree, no drug convictions. We received a 1098-T for him and a 1099-Q in his name that went toward eligible room and board expenses. We also received a 1099-Q to my husband from the same 529 account for required books.
1098-T Box 1 - $16630 Box 5 - $17250
The 1099-Q made out to us was $877. That was the exact qualified book expense. I listed that under the education expense area for books not required to be purchased directly from the school in the Education area and have the 1099-Q in the Less Common Income, Miscellaneous area of the program.
We didn't pay anything out of pocket, all expenses were paid either from scholarships or the 529 account. We will need to report $620 of the scholarships as income since it was applied to room and board. It's my understanding we wouldn't qualify for AOTC because nothing was paid out of pocket but TT is saying we qualify for $1067.
My questions....
1. Does it matter now or next year if the 1098-T is wrong and only has the Fall semester? The box is checked that this is for 2021 and the first 3 months of 2022, however, this is not correct. If that included the Spring semester, according to statements it should be Box 1 - $33230 Box 5 - $34500. I'll be calling the school Monday for help on that but have currently completed TT with the information as is. The 1099-Q's for both us and our son ARE for qualified expenses for both semesters. Again, I'll contact the school for clarification but when I check or uncheck that box in TT, it doesn't affect anything.
2. When putting in the current 1098-T, it asks if any of the scholarships were already included in income. We did not claim the $620 of scholarships, that need to be claimed, previously. We do not have a w-2 or 1099-MISC stating this amount. We computed it off of statements. If I follow the less common income route back in personal income, it seems to want to apply any of the options to my spouse or I. So how to I get it marked SCH? I'm using TT Home and Business.
3. We'll use his 1099-Q on his return. It went toward eligible room and board expenses ($10,285). Does it need to be reported at all? He does have income from a summer job at $2900 with about $150 in tax withholding that would be returned (w-4 wasn't adjusted until a few paychecks into summer) so he does want to file.
4. And the biggest question, is do we really qualify for AOTC? Without the education piece entered at all, the refund is $1,133. It goes up to $2200 (as TT says we qualify for the $1067) after I enter the 1098-T, the 1099-Q for us as everything currently stands.
