Kris is talking about the 1099-Q. Your 1099-Q does include your prepaid expenses for 2025. I was thinking those would be eliminated with room and board, etc. I was looking at the education credits primarily.
Prepaid tuition is for tuition paid in 2024 for classes in 2025, which is on your Q but not on your 1098-T. This is where it gets tricky. Note that Pub 970 specifically states that you can't use money paid in 2025 to claim the education credit for 2024.
I went to Pub 970 and found a few things to help decipher your situation.
- Form 1098-T, Tuition Statement. When figuring an education credit, use only the amounts you paid and are deemed to have paid during the tax year for qualified education expenses. In most cases, the student should receive Form 1098-T from the eligible educational institution by January 31, 2025. However, the amount on Form 1098-T might be different from the amount you actually paid and are deemed to have paid.
- You must be able to substantiate the payment of qualified tuition and related expenses for that tax year.
- Example: Glenda enrolls on a full-time basis in a degree program for the 2025 spring semester, which begins in January 2025. Glenda pays the tuition for the 2025 spring semester in December 2024. Because the tuition Glenda paid in 2024 relates to an academic period that begins in the first 3 months of 2025, the eligibility to claim an American opportunity credit in 2024 is determined as if the 2025 spring semester began in 2024. Therefore, Glenda satisfies this third requirement.
- You can't use any amount you paid in 2023 or 2025 to figure the qualified education expenses you use to figure your 2024 education credit(s).
I don't know what your numbers look like or where things landed except you said it was costing you money which means you are not claiming the credit but instead has some 1099-Q or scholarship that became taxable.
Now that you have filed, once the return is accepted, you can file an amended and correct the Q portion without claiming the education credit for the 2025 tuition payment.
See Adjusted qualified education expenses (AQEE) for calculating the taxable portion of the Q.
See How do I amend my federal tax return for this year?
See I need to amend my state return.
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