1098-T and taxable scholarships reporting

[catkik]

My daughter received more scholarships this year than her qualified educational expenses. All of her college expenses are paid by the scholarships. She also had a paid internship summer 2024 and received W-2. We claim her as a dependent. We did not pay any of her educational expenses. She has to file taxes because of her income from an internship and scholarships. 

Who reports information on scholarships and educational expenses? Who reports 1098-T? Do we, parents, report her scholarships/expenses on our taxes? or does she report it all?

We did not pay any of her educational expenses. Everything - tuition, books, room and board got covered by her scholarships. So we cannot qualify  for any educational credits. 

Thank you!

[AmyC]

1. Credits go to the parents, income to the students.

2. You might both end up reporting the 1098-T. Parents for credit, student for income.

This can go two directions:

1.  The IRS has a great brochure that explains how scholarships and tax credits interact. You may be able to claim education credit, if you qualify, despite not paying anything. You would claim up to  $4,000 tuition paid for a large credit on your return while she pays a little extra tax on hers.

2. If you don't qualify for a credit, it all goes on her tax return.

 What You Need to Know about AOTC and LLC states:

• You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).
• You cannot claim the credit if your MAGI is over $90,000 ($180,000 for joint filers)