Claiming Pell Grant As Income

[Jesse0831]

Is it allowed to claim your Pell grant as income to increase the amount of education credit.  On my 1098 t box 1 is higher than box 5 . I am single and can no longer be claimed as dependent on my parents return

[KrisD15]

Yes, but if your parents (or anyone else that might have claimed you) claimed the American Opportunity Tax Credit using your expenses, you would need to count those times as part of the limit of 4. They claiming the credit would be the same as if you claimed the credit

If Box 1 is more than Box 5, you already have more expenses than scholarships/Grants.

If you are eligible for the American Opportunity Tax Credit, that credit maxes out with 10,000 expenses.

Enter your income first, then all the education information, such as the 1098-T.

Go through the ENTIRE interview until you get to the "Maximize My Tax Break" screen. 

The program will decide if claiming any of the Pell Grants would be advantageous to you. 

IRS Pub 970 explains more