1098-t and education credit

[peanut10]

I cannot figure out how to get this credit when I type in the 1098-t on mine (parent) it says can’t be claimed. When my kid does it, it says you can’t because someone else claims you. I am filing HOH and my kid is filing single with 1098-t and her w-2

[DawnC]

If you are claiming her, the 1098-T goes on your return.   Make sure she is listed as a dependent on your return.   See Education Credits to make sure you qualify.    

[peanut10]

On her 1098-t box 5 is bigger than 1 and turbo tax says she needs to file it. She’s also got w-2 of 13,385.

[AmyC]

You have to move the money around for you to get the credit. It generally is worth you getting a big credit and your student having a little more income. The IRS has a great brochure that explains how scholarships and tax credits interact. This would allow you to enter the 1098-T and perhaps claim the scholarship income went to living expenses enough to give you $4,000 tuition for credit.

Then, the form does go on your student's return where you will need to claim all the income that didn't go towards tuition from your return.

Also, on her taxes, scholarship income can trigger the Kiddie Tax. See What is the Kiddie Tax?

[peanut10]

So confused! I don’t understand because the 1098-t is what it is. Approx she’s  got box 1 9000 box 5 20000 and w-2 income 13385. I read the brochure but because it didn’t reference to a 1098 i didn’t understand 

[AmyC]

Oh, she has good numbers for both of you. You can claim $4000 tuition money for the AOTC on your return. She has no taxable scholarship income since $9000 tuition - 4000 AOTC = $5000 which is bigger than $2k.

Maybe your income is too high to claim the AOTC. If you make over $90k, you won't be able to claim it. See What education tax credits are available?  

A dependent can't claim the education credit. There is no need to enter the 1098-T on her return.