Should my hazlewood benefits be included in block 5 of my 1098-t form or in the veterans benefits block area?

[KrisD · Accepted solution]

The school reports and issues the 1098-T. If you received hazlewood benefits, it should be reported in Box 5 unless the school simply did not charge you the tuition fee. If the fee was never billed (Box 2) then the benefit would not be reported. 

Check your student account statement. If all the tuition was paid or exempt because of the hazlewood benefit, there is nothing you need to report. If you do have out-of-pocket expenses, you may report those and apply for a credit. 

[dowellj4501]

My school put my Hazlewood benefits in block 5 along with my grants and loans. Since my Hazlewood benefits are in block 5 is causing and off set when subtracted from box 2 making me have to pay taxes on my scholarship and my grants. Is it normal to pay taxes on grants and scholarships? Should I subtract my Hazlewood benefits from block 5 and put it the veterans benefits section, or keep it in block?

[KrisD]

Did you get cash from the tax-free assistance? Also, be sure to look at your student account statement. Box 2 reports what the school billed, but it gets confusing when the year overlaps. Did you get a 2016 1098-T?

[KrisD]

Yes, to answer your previous question, tell the program that part of box 5 is VA assistance because that cannot be taxed. hazlewood cannot be taxed.

[dknapton]

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?