@ldra
Q. Am I able to enter the 1098T on my return and claim the education credit even though part of the amount in Box 1 was paid using a 529 distribution directly to the school?
A. Yes. But, you haven't provided enough info to determine, how much, if any, of the 529 distribution (1099-Q) will be taxable. Saying "my dependent who did not earn more than $12k does not have to file a return" is insufficient info. As little as $1100 of the 1099-Q being taxable makes him need to file.
Provide the following info for more specific help:
- Are you the student or parent.
- Is the student the parent's dependent.
- Box 1 of the 1098-T
- box 5 of the 1098-T
- Any other scholarships not shown in box 5
- Does box 5 include any of the 529/ESA plan payments (it should not)
- Is any of the Scholarship restricted; i.e. it must be used for tuition
- Box 1 of the 1099-Q
- Box 2 of the 1098-Q
- Who’s name and SS# are on the 1099-Q, parent or student (who’s the “recipient”)?
- Room & board paid. If student lives off campus, what is school's R&B charge.
- Other qualified expenses not included in box 1 of the 1098-T, e.g. books & computers
- How much taxable income does the student have, from what sources
- Are you trying to claim the tuition credit (are you eligible)?
- Is the student an undergrad or grad student?
