Scholarship not being included in same year as tuition paid on 1099-T - American Opportunity Tax Credit

[ZadenRB]

Hi, I'm having trouble understanding why I am not eligible for the AOTC refund in 2023. I was eligible in 2022 (the first year I claimed it) and am still providing my own financial support. I believe the issue has to do with how my school is reporting my scholarship on my 1098-T. Context below.

I have a $16,000 scholarship per semester (pro-rated for summer semesters).

On my 2022 1098-T, I have $30,138 in payments received (Box 1), and $16,000 in Scholarships (Box 5) and Box 7 is checked, because my school charges Spring tuition in December. The $30,138 in payments received on the 2022 1098-T is all for my 2023 Spring semester (Did not attend in fall of 2022), but the $16,000 in scholarships is actually my scholarship for the 2022 spring semester.

My 2023 1098-T only shows the tuition charged for a summer class I took in 2023 to graduate, $7608. However, it includes the $16,000 scholarship for the Spring 2023 semester plus the $4000 for the summer semester. As a result, if I do not modify my 1098-T, my aid received is greater than payments received, and I do not qualify for the AOTC.

Is there any way for me to remedy this? Or does the fact that my school reports Spring tuition the year prior and the Spring scholarship the year of the term mean I do not qualify? It seems odd to me that my 1099-T for 2022 includes tuition for Spring 2023 but not the scholarship for Spring 2023, and that my 2023 1099-T includes my Spring 2023 scholarship but not the tuition.

[KrisD15 · Accepted solution]

Box 1 on a 1098-T is WHAT WAS PAID, not what was billed. 

The 30,138 in Box 1 on the 2022 1098-T represents the school saying you PAID 30,138 in 2022.

If the school billed in 2022, but the scholarship did not pay until 2023, then that amount should not be in Box 1 on the 2022 1098-T. 

You can go forward, pay in December for classes that start in January, but you can't go backward, pay in January for classes that ended in December. 

So what you are saying is that the school was paid 7,608 plus 16,000 for a total of 23,608 in 2023. 

IF THIS IS TRUE, use the "What if this is not what I paid" link under Box 1 on the 1098-T screen and enter the amount paid in 2023. Keep proof, such as your school account records with your tax file. 

HOWEVER if this is true, then your 2022 1098-T would be wrong and Box 1 on the 1098-T of 30,138 would have been offset with 32,000 (16,000 + 16,000) in Box 5, meaning you may not have been eligible to have claimed the education credit in 2022. 

Again, you need to look at your school records and decide what was paid in which year. 

If you attended in 2021, you need to see if amounts overlapped that year as well. 

IRS Pub 970 

[ZadenRB]

Thank you - I had left out some details around additional amounts from federal loans etc. But your point about 2022 potentially being wrong led me to go back and review my statements and 1098-T for all four years. That let me confirm that the $16,000 (+ loans) for spring of 2023, which paid in 2023, were just completely unaccounted for. I also confirmed that my 2022 filing was correct based on amounts paid in that year, and I did qualify for the credit in 2022 as well. My university did change how their 1098-Ts were prepared this year, so that's likely the reason this happened. Thank you for pointing me in the right direction 🙂