Our situation regarding Hazlewood benefits is the opposite of yours. In 2022 Texas A&M College Station issued us a 1098-T for our dependent full time student/daughter that includes in box 1 the total cost of tuition, while box 5 reflects no value reported relating to the Hazlewood benefit, which would completely match (offset) the amount reported in box 1. I have entered the values according to the amounts reported on the 1098-T, making no changes. The result is that the amounts reported in box 1 are (thankfully) generating qualifying education costs that allow us to qualify for the American Opportunity Tax Credit (AOTC). I'm thankful... but a little concerned if that is the correct approach to reporting qualifying education costs. Our daughter paid to the university no tuition amounts besides what was reported and covered by Hazlewood benefits.
I have not filed my tax return yet. Before I do, I would like to be more confident in claiming the AOTC for tuition costs covered by Hazlewood. Can any other Texas tax filers receiving Hazlewood benefits speak into whether or not their Texas universities excluded their Hazlewood benefits from box 5 of their 1098-T? And if so, were you successfully and rightfully able to claim your AOTC education credit based on tuition amounts reported in box 1 but covered by Hazlewood?
