Q. I'm not following why I need to enter $4,000 as his room and board grant was only $2075 and the rest was used for qualified education expenses. Can you explain?
A. You said you are "already receiving a credit for this". $4000 of tuition is the usual amount needed to get the maximum American Opportunity Credit (AOC or AOTC). So when calculating how much of his scholarship is taxable, that $4000 must be taken into consideration. "the rest was used for qualified education expenses" may not be an accurate statement.
The $2075 room & board (R&B) scholarship is not a standalone number.
Total scholarship (including the $2075) less NET Qualified educational expenses (QEE) equals the taxable scholarship income. R&B are not QEE. "Net" qualified expenses is total QEE less the amount used to claim the credit.
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
- Is any of the Scholarship restricted; i.e. it must be used for tuition
- 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?
