1098-T calculates erroneous taxable income. If scholarships are less than qualified education expenses, there should be no tax impact; however Turbo Tax as of 2/21/04 is erroneously calculating tax on the scholarship amount, regardless of qualified education expenses. Please fix software and advise when complete ASAP. Thank you!
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One of two things happened:
IRS Publication 970, Tax Benefits for Education states:
If the entire 1099-Q went to qualified expenses, room and board, tuition, etc then you do not need to enter the form. Tuition paid for the first 3 months of the next year also qualify, see page 12, What Expenses Qualify, and page 52 for qualified distributions.
Reference: Qualified Education Expenses - Internal Revenue Service
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