Tuition Credit miscalculation
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Level 2

Tuition Credit miscalculation

I have an 18-year-old daughter in her first year of college. Despite being enrolled in a qualifying degree program and entering 1098-T info that shows tuition as greater than scholarships, TurboTax is telling me (on my taxes):

a) scholarship $ have to be entered as income on her taxes because she did not have tuition expenses for scholarship and 

b) she does not qualify for credits because she is not enrolled in a degree program.

 

I've gone back multiple times trying to correct entry, but cannot fix. TT is giving me a $4000 tuition deduction as my best option.

(TurboTax Home and Business 2019)

3 Replies
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Expert Alumni

Tuition Credit miscalculation

Here are some steps to take to diagnose the issue with your education expenses:

  1.  A scholarship or fellowship grant is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution.  Check you answer to that question in TurboTax. Note that sometimes it is difficult to get back to the original questions, so if you seem "stuck" in the middle of the interview, keep clicking to "Continue" until you reach the summary screen at the end and you can edit the each section of you education expenses there.
  2. Make sure the 1098-T is identified with your daughter instead of someone else on the return.
  3. Check your entry of the Form 1098-T to make sure you entered the correct amounts and checked all the boxes in TurboTax that are checked on the actual Form 1098-T. 
  4. Check your response to the question about if your scholarship was used for room and board.  To the extent you used a scholarship for room and board instead of "qualified" education expenses such as tuition and books, it is taxable to the scholarship recipient.
  5. Check your response to the question about whether your scholarship was payment for teaching, research, or other services. If it was, it is taxable.
  6. Education expenses for tuition are generally considered qualified only if paid to an eligible institution, so find that question and make sure it is answered correctly.
  7. The American Opportunity Tax Credit (AOTC) has several qualifications, including a limit on your adjusted gross income.  Compare your situation to the AOTC qualifications at this IRS link.

If these steps don't identify the issue, see IRS Publication 970 at this link for the complete rules on whether you education expenses are qu....

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Level 15

Tuition Credit miscalculation

You've entered something wrong. 

Go through the entire education interview until you reach a scree titled "Your Education Expenses Summary".  Click delete next to the student's name.  Start over

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Level 2

Tuition Credit miscalculation

Thanks for the replies here. 

The reply that walked through all the things to check is a great guide for others in understanding the form. I had completed the TT questions correctly, but this was a vary helpful summary to confirm.

 

The reply that explained how to delete was also helpful. I kept going back through and trying to fix by answering and could not. I was afraid I was going to need to start my return over. The advice to delete at the summary section could save someone a lot of time.

 

I ended up fixing the problem by pulling up the forms. Information was in the correct place, but the form had left blank several critical places. I edited the form directly and ran the calculation and that worked.

 

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