If you are the parents claiming a student as a dependent and you don't qualify for a credit,
don't enter the 1099-Q if it was used to pay education expenses including Room and Board
don't enter the 1098-T into your program since you don't qualify for a credit
If the 1098-T shows the student needs to claim income, enter the amount the student needs to claim as income on the students 1040 line 1.
Apply the distribution to expenses that don't qualify for a credit first, such as room and board.
Then apply to expenses not listed on the 1098-T such as books and supplies.
Apply any remainder to Box 1 of the 1098-T by subtracting it out.
Subtract the remaining tuition expenses from the scholarship. That is the income the student would need to claim.
If there is more expense than scholarship or other financial aid, there is no taxable income for the student to claim.
You CAN enter the forms in your TurboTax program if you want the program to do the math.
@CNemeth1
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