Q. Box 5 is filled out as $6069. I cannot continue unless I lower this value, so I changed it to $5250, and had the remaining $819 as tuition reported as income on my W2. Is this correct?
A. Yes. Rather than getting bogged down in the interview, just change box 5 to $5250, when you enter the 1098-T,* since you know that is the correct amount.
Bottom line: you can use $819 to claim the tuition credit.** This is because that much was paid by "you," with your after tax employer benefit (only the first $5250 was tax free assistance).
*The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return.
If you claim the tuition credit, you do need to report that you got one (the TurboTax interview will handle this)
You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2023 expenses".
Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.
**If you are an undergrad, and have not used the American Opportunity Credit (AOC) 4 times, in the past (including when you were a dependent), you can add the cost of books. But, if you'll have more expensive undergrad education, in the future, you may want to save your 4 AOCs, for later.
