Q. " I am not eligible for a tuition credit (all tuition was paid by the 529 anyway which I believe would preclude me from taking the credit?"
A. No. That's not true. "All tuition was paid by the 529 only means you can not claim the same tuition expenses for both the credit and the tax free earnings of the 529. But you may select which ever works best for you, and that is almost always the tuition credit.
Q. Am I on the right track?
A. No. You are not locked to using the certain funds for certain expense. You may allocate them for your best advantage.
Let's start over. The quick workaround previously described doesn't work because you don't meet the assumptions. 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 1099-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 (Is your income less than $90K ($180K Married jointly))
- Is the student an undergrad or grad student?
