I don't think I'm understanding this question correctly. Did financial aid include amounts not awarded for 2016 Expenses?

[jenniferhmorrow]

90% of financial aid (grants/loans) covered the cost of book and supplies, room and board, meal plan, etc. Hardly any money left over after expenses. I'm trying to claim the Educational credit for my daughter, but it keeps saying she needs to file taxes to account for her federal student aid. She has never been employed and is my dependent. I am so confused with how to plug in the numbers for college expenses. Please help.

[cherieanna06 · Accepted solution]

Your daughter would get a form 1098-T that she would use to report her scholarships and grants as "income". The portion that she used for room and board is not considered an educational expense so you can't get an education credit for that amount. It is considered income. So, for example, say she paid $500 per month for rent for 6 months in 2016. $3000 of her scholarships and grants would have to be reported as income. To report this amount, Turbo tax will ask you to enter it as amount paid for room and board and not qualified tuition and related expenses on her tax return. I hope this helps!