It depends. Are your parents claiming you or are you claiming yourself?
Parents claiming - determine how much tuition they are using and what you need to claim.
Parents not claiming -
- If your box 5/ stipends equals or less than box 1. No need to report unless you are filing for the education credit.
- If box 5/ stipends greater than box 1, you have income that needs to be accounted for or taxed. You may have to add your stipend to box 5 to account for it.
See What You Need to Know about AOTC and LLC to determine if you qualify for an education credit. Next, check to see if your stipend is restricted to tuition or can be used for room and board. If it can, you can move numbers around to get the Lifetime Learning Credit. For example:
- Box 1 $25k and box 5 is $40k.
- You need $10k for tuition, this leaves $15k available to be covered by scholarships.
- $40k scholarships used $15k for tuition, then remainder, $25k went to room and board.
Check form 8863 for education credits. Adjust numbers for room and board to maximize your refund. This is allowed. The IRS has a great brochure that explains how scholarships and tax credits interact.
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