1098-T

Forum|Forum|5 years ago
April 12, 2021
4 replies
17 views

My son is completing his tax return. He received a 1098T. Doe he needs to pay taxes for box 5 scholarship/grants?

Thank you

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MinhT1

Level 15

Scholarships and grants not used for qualified education expenses are taxable for the student receiving them.

If your son is your dependent, you only can claim his education expenses. And he has to report as taxable income any scholarships not used to pay for education expenses.

Please read this IRS document on Education expenses.

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TaxTim1

Level 5

Great question! This area can be frustrating and confusing. Of course the IRS publications are the authoritative sources & provide great detail but check out this article from TT which gives a great short overview. Hope it helps.

https://turbotax.intuit.com/tax-tips/college-and-education/taxes-for-grads-do-scholarships-count-as-taxable-income/L2hWn0lpe.

Thanks.

AmyC

Level 15

That's right, anything not used on qualified expenses, is taxable. But, you may want to make more of it taxable for you to get the most credit. Please look at another of my answers for help

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NCperson

Level 15

he is paying taxes on the NET if Box 5 exceeds Box 1; you get a credit if Box 1 exceeds Box 5. there are ways to move some of the money around to maximize the credit - scan through the 'education' part of the community - plenty of resources there.

he doesn't pay taxes solely on Box 5 and you take the credit solely on Box 1.