topic Why is my refund amount going down after I enter my 1098-T? Box 5 is greater than box 1, but scholarships were only used for qualified education expenses in Education

Why is my refund amount going down after I enter my 1098-T? Box 5 is greater than box 1, but scholarships were only used for qualified education expenses

brooklynlear-cat — Sun, 01 Mar 2026 01:44:55 GMT

My federal and state refund amount went down after I entered my 1098-T. I shouldn't be taxed on the scholarship amount.

Re: Why is my refund amount going down after I enter my 1098-T? Box 5 is greater than box 1, but ...

CesarJ — Sun, 01 Mar 2026 01:57:34 GMT

Consider reviewing the Education section within the Deductions and Credits part of your tax return. When entering information from Form 1098-T, you will be asked if additional scholarship money was applied toward legitimate educational expenses not already listed on the form. You should answer "yes" to this question and then input the specific tuition amount that the scholarship funds were used to cover.

Re: Why is my refund amount going down after I enter my 1098-T? Box 5 is greater than box 1, but scholarships were only used for qualified education expenses

Hal_Al — Sun, 01 Mar 2026 02:17:48 GMT

You said "scholarships were only used for qualified education expenses".

Scholarships that pay for qualified educational expenses (QEE - tuition, fees, books and other course materials) is tax free. Scholarship amounts that exceed QEE is taxable income, on the student’s tax return. Room & board are not QEE.

If box 5 of the 1098-T exceeds box 1, TurboTax (TT) will treat the difference as taxable income, unless you enter additional QEE at books and other expenses.

If you are entering the 1098-T, on your return, TT will advise you that your student has taxable scholarship income to be reported on his/her return. It will not (and should not) enter the taxable scholarship on your tax return.

Re: Why is my refund amount going down after I enter my 1098-T? Box 5 is greater than box 1, but scholarships were only used for qualified education expenses

Hal_Al — Sun, 01 Mar 2026 02:19:07 GMT

Here's a post on the five main points on the 1098-T:

https://ttlc.intuit.com/community/college-education/discussion/re-what-do-i-do-with-form-1098t/01/3760212#M63114