My son has school provided health insurance amounts included in 1098-T Box 5. The insurance is NOT included in the “qualified” expense amount in Box 1.
At his school, health insurance is mandatory & students are auto enrolled in the plan, but may waive it. He’s not eligible anymore for the American Opportunity Tax Credit (AOTC).
In IRS publication 970, health insurance is not listed in Chapter 1 as either a qualified education expense or as an expense that doesn't qualify. However, it is listed in the succeeding section regarding eligibility for credits such as with the AOTC as an expense that doesn't qualify. But, since he is not eligible for AOTC, that section seems like it is not relevant.
So, may he deduct the insurance? If so, how is the deduction made (such as either adding it to Box 1 or subtracting it from Box 5?
Why is this situation ignored by the IRS and Turbo Tax for that matter?
