NYS College Tuition Credit

[Rbtt123]

I received form 1098-T for my daughter. She was an undergraduate student in Spring 2021 and a Graduate Student at the same school in Fall of 2021. The 1098-T shows the total tuition paid to the school (both Undergrad & Grad) for 2021 and Box 9 indicates that she is a graduate student. I would like to take the credit for the undergraduate tuition but not sure how to enter on turbo tax. I know NYS will deny the credit if I  enter the 1098-T as is because I had the same  situation with my son's 2019 Undergrad & Grad tuition . Still working on resolving that with NYS. Any suggestions will be appreciated.

[JohnW152]

To achieve this, you might try splitting all the amounts on the 1098-T into graduate and undergrad numbers.  Be as precise as you can, and only make estimates if you have no other option.

When you get to the Type in the info from your 1098-T screen, don’t check Box 9 – Graduate student, and enter all of the undergrad info.

Then, enter a second 1098-T,  and at the Type in the info from your 1098-T screen, check Box 9, and input all of her graduate information.

[Rbtt123]

Unfortunately this didn't work.  I entered as 2 separate 1098-Ts but NY seems to lump both together on form IT-272 (probably because if schools EIN ). I'm not sure why TT is pulling the graduate tuition to the NY form when box 9 is checked? any other suggestions ?

[KrisD15]

Do you need all the expenses, undergrad AND grad to get the full credit on the Federal Return? 

If not, only enter the undergrad expenses on the 1098-T screen in TurboTax. 

You MAY use all the expenses, but if the expenses for the grad school is not needed, why enter them? 

If there are scholarships involved, you'll need to split that as well as long as the portion of scholarship you leave off is not more than the portion of expenses you are leaving off.  

You should be able to use the student school account statement for reference. 

According to the IRS:

"Example 2. After taking classes at College V on a part-time basis for a few years, Shelly became a full-time student for the 2021 spring semester. College V classified Shelly as a second-semester senior (fourth year) for the 2021 spring semester and as a first-semester graduate student (fifth year) for the 2021 fall semester. Because College V didn't classify Shelly as having completed the first 4 years of postsecondary education as of the beginning of 2021, Shelly is an eligible student for tax year 2021. Therefore, the qualified education expenses paid for the 2021 spring semester and the 2021 fall semester are taken into account in figuring the American opportunity credit for 2021."

PUB 970

[Rbtt123]

There is no credit on Federal return due to income limitations, the Issue is with NYS return (College tuition credit). I decided to enter just the undergraduate tuition portion only but I am certain NYS will disallow it since it doesn't match to the 1098-T (which has her marked as grad student). Still working on having a prior yr credit disallowance reversed by NYS for my son's similar issue. Was hoping to avoid it for this year. Wondering if the schools should issue separate 1098-Ts in these circumstances. I also think there may be an issue with Turbo tax because its pulling the tuition marked as "graduate" in box 9 to the IT-272....

[KrisD15]

I think I understand, but perhaps not. 

Although it does not match the 1098-T, you should be able to use the student account statement as proof of undergrad expenses. 

If NYS is going to give you grief about it not matching the 1098-T, only the school can correct and reissue a 1098-T for her undergrad expenses separately. 

[Rbtt123]

Thanks. Just hoped there was another solution ..odd that 2 different schools report the same way, not sure if they will reissue ..anyway I have proof Ugrad portion paid if NYS disallows the credit.

[KrisD15]

My only thought is, so that a Taxpayer will claim all the expenses towards a Federal Education Credit, since most people would assume they would need to separate the expenses. This does cause an issue for the states that handle things differently. 

Thank you for using TurboTax.