topic Education deductions in Get your taxes done using TurboTax

Education deductions

Ed6969 — Wed, 19 Mar 2025 16:14:04 GMT

How to do let TurboTax know that scholarship monies are to room and board and not to paying tuition and fees?

Also, tuition and fees are being paid by 529 Prepaid Va program. How is that indicated on the program? In addition, prepaid did not pay for the tuition and fees above 17 credits so the additional 1 credit was paid with EE saving bonds. The 1099Q is in my daughter's name and therefore is not used for our taxes, correct? But we are to use the 1098T since she is still a dependent, correct?

Thanks,

Re: Education deductions

RobertB4444 — Wed, 19 Mar 2025 16:18:45 GMT

Any scholarship used for room and board is taxable. If the amount of scholarship is greater than the amount of tuition then the program will take care of that for you.

If the 1099-Q represents money spent for educational purposes it doesn't need to be entered in to the tax return at all.

Since the student is still a dependent then the 1098-T is entered on your return.

@Ed6969

Re: Education deductions

Ed6969 — Wed, 19 Mar 2025 16:28:04 GMT

Thanks.

The tuition on the 1098T is 17901, scholarship is 3875. So, the program will not default to the scholarship monies to room and board. The school did since 529Prepaid VA pays for tuition and fees up to 16828. So do i need to distinguish the difference in TurboTax?

Re: Education deductions

MarilynG1 — Wed, 19 Mar 2025 16:49:57 GMT

When you enter the 1098-T, the amount of scholarship is subtracted from tuition, leaving the balance available for an Education Credit. The balance of tuition is assumed to be paid by you. It's not necessary to designate the scholarship as applied to Room & Board, unless you want to indicate that by entering the 1099-Q.

This will add Room & Board as an option in the Education Expenses. However, this may reduce the amount of the Education Credit you are eligible for.

You can test it both ways in TurboTax. Leave the 1099-Q and Room and Board out of the Education Expenses section and see what amount of Education Credit is calculated for you. You could then add the 1099-Q, indicate the amount of Room and Board, and compare the results.

Here's more info on Education Credits.

@Ed6969