Entering 1099-Q on Dependent Child's Tax Return

[sonofdod]

Thank you for the prompt reply and I will review in detail but wanted to quickly ask about the requirement to file.  I thought the requirement to file was based on the amount of income but are you saying she would have had to file regardless simply because she received unemployment?  Thank you.

[sonofdod]

Sorry if I'm being dense about this but I want to be sure get it right after my earlier missteps.

When you say "We assign $4000 of expenses to the AOTC, allowing you to claim that.", how is this done in TT and on which return?

When you say "enter a 1098-T with box 1 blank and $5117 in box 5", is that on the parent return or the student return?

Is the student return to reflect someone can and will claim them as a dependent in this scenario?

Thank you so much.

[Hal_Al]

Yes,  the requirement to file is based on the amount of income. But the amount of that requirement  is based on the type of income.  Since she has unearned income (unemployment) over $1100, she is required to file.  Note that if her income consisted of wages and/or taxable scholarship she would not have had to file until she had $12,400. 

*Your dependent child must file a tax return for 2020 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship ) of more than $12,400 (2020).
2.          Unearned income (interest, dividends, capital gains. unemployment) of more than $1100.
3.          Unearned income over $350 and gross income of more than $1100
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12,400 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

[Hal_Al]

Q.  When you say "We assign $4000 of expenses to the AOTC, allowing you to claim that.", how is this done in TT and on which return?

A. Good question.  I left out that important detail (I was concentrating on your daughter's return). On your return, you enter your daughter's 1098-T, but you modify what you enter.  You enter $4000 in box 1 and leave box 5 blank. Enter no other numbers.  That's the short cut. Again, lying to TT is not lying to the IRS.

Q. When you say "enter a 1098-T with box 1 blank and $5117 in box 5", is that on the parent return or the student return?

A. On the student's return. And, yes,  it is OK to use the 1098-T on both returns. 

Q. Is the student return to reflect someone can and will claim them as a dependent in this scenario?

A. Yes. 

[sonofdod]

Thank you for explaining that.

My daughter did receive a 1098T from a community college with $161.25 in box 1 and nothing in other boxes.  On which return (parent or student) do I enter this particular 1098T?

The other 1098T info which is to be entered (differently) onto both returns should be associated with the university that did not provide a 1098T - correct?

[Hal_Al]

Q. My daughter did receive a 1098T from a community college with $161.25 in box 1 and nothing in other boxes.  On which return (parent or student) do I enter this particular 1098T?

A. Both

Q. The other 1098T info which is to be entered (differently) onto both returns should be associated with the university that did not provide a 1098T - correct?

A.  Don't enter that one at all,  since you'll have to dig up info like the school's EIN and only one 1098-T should be entered.    Use only the community college 1098-T, but don't enter the $161. 25.  Use only the amounts provided earlier ($4000 in box 1 on your return and 5117 in box 5 on hers).

[sonofdod]

OK so the only 1098 info I'm enter will be using the 1098T I received from the community college (on both returns) even though the box info I'm entering will be per our discussion.  Should I though check the box that states at least half time (the community college did not as it was 1 class).  Thanks.

There will be no entry on either return naming the university that did not provide a 1098T. Is that correct? It seems a little odd not to be naming that university as that's where my daughter was a full time student in 2020.

[sonofdod]

and for what it's worth i've already gathered the info to create a 1098T for the university that did not provide. if that's the preferred method for entering this info even though an actual 1098T was not provided.

[Hal_Al]

I was trying to save you a little work.  But, you are correct, it would be better if you entered the school where she was a full time student. The information goes on IRS form 8863. 

Since you didn't get a 1098-T from that school, you gonna have to work thru the interview. I don't think you can say you got a 1098-T, when you didn't because it checks a box on form 8863.

 You will need to enter the school info, including EIN. 

On your return answer that you didn't get a 1098-T. Then answer that you qualify for an exception. You will still be asked for the tuition paid. Enter $4000.  Do not enter any other numbers. 

On her return, answer that you didn't get a 1098-T. Then answer that you qualify for an exception. Leave tuition blank. She will eventually be asked about scholarships. Enter $5117.  Do not enter any other numbers. 

But yes,  check half time regardless of which school you enter.

[sonofdod]

So on the parent return where we're showing tuition, i will have one 1098T with $161.25 in box 1. that wasn't halftime so i won't check that box.  then on the parent return i complete the interview and put the diff ($4k - $161.25 = $3,838.75) all in tuition OR in the other interview fields like books, materials, computers, etc?

Then on the student return just complete the interview and enter the scholarship amount. That's seems pretty straight forward.

I think I'm close to getting this; thanks for hanging in with me.

[Hal_Al]

On her return, she could still use a bogus 1098-T, for ease of entry,  because form 8863 will not be generated, for her circumstance (not claiming a credit)

[Hal_Al]

I kinda forgot about the $161.  I don't remember if we included it in the calculations above or not.  If so, we effectively already allocated it to the 529.  I would just not enter it.  It doesn't change anything on either return.    

Don't put anything in fields like books, materials, computers, etc. It's not needed and only risks making errors.

[sonofdod]

yes, the $161 was included in the $9,374 number.  

am i obligated though to report that 1098T somewhere since the community college sent it to my daughter? if so, i guess i would it on the parent return.  i'm a serious rookie at this though.

thanks.

[Hal_Al]

Q. Am i obligated though to report that 1098T?

A. No. 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. 

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T.