Do both parent and dependent child list the 1098T on their returns when parents are claiming the deduction?

[majorbotts]

Our son’s college has issued a 1098T in his name, but we're (Parents filing jointly, with son as a dependent) paying for and taking the tax credits for his expenses on our return.

When doing our SON'S taxes, Turbo Tax is asking if he received a 1098T. Since we are claiming it on our taxes, do we just say he didn’t receive a 1098T, or do we still need to include in both our returns since it’s in his name? - If I answer "yes," then it seeks out deductions that will be taken on our taxes. If I answer "no" then it skips the deductions, but gives me concerns that it will be flagged as an unreported tax form, causing issues down the road.

Thanks for you help! 

[mcarp1995]

Still struggling here..I answer no on her tax form that she received a 1098-T since I am claiming her as my dependent.  Then I answer yes on my form?

[gr2mom]

I had the exact same question. I couldn't find a direct answer either. I know that only one of us can claim the expenses but TurboTax is still asking for this info on my son's return. So I entered the 1098-T on my return and claimed all expenses and took the credit. For my son, at the prompt I entered the 1098-T again and that's when TT told me that he's not eligible since he was claimed somewhere else and the credit/expenses were already taken. I believe this is where the confusion begins. TurboTax explains all of this but then says, "However, you should enter your education expenses to avoid paying tax on your Education Savings Account (ESA) or qualified tuition program (QTP)." Why does it tell us to put it all on parents form and then asks child to still enter education expenses here on his own? I switched to forms and checked my son's 1040 form to confirm that even though I entered the 1098-T again on TT on his form, he is receiving 0 for education expense and 0 higher education credit. My husband and I have it on our return.

[miranda-west]

so is it correct to say no when asked if dependent received 1098t if parent put the info on their return

[Hal_Al]

Yes. The 1098-T is only an informational document. There is no requirement to enter it. Entering it on the student's return just makes it complicated and can lead to mistakes.

[kendogirl]

I don't like TT on doing this if it is unnecessary.

[JayKepps]

This is a serious point of confusion, and no one has answered it definitively.  So much for TurboTax online support, huh?   The prompts regarding tuition expenses and 1098-T forms lead users in circles. It's been 4 years since someone brought this up, how about someone at Turbo Tax stepping up to the plate and fixing this mess once and for all?

[Hal_Al · Accepted solution]

Answer no on his return, since you have already claimed it on yours. The 1098-T is only an informational document. There is no requirement to enter it. Entering it on the student's return just makes it complicated and can lead to mistakes.

[rnrcross]

Wou?ld this be true of the reverse? We are claiming our daughter as our dependent but would like her to claim all of her tax credits. Should we answer no on our filing when it asks if she received a 1098-T

[Hal_Al]

If she is your dependent, she is NOT allowed to claim the tuition or any other tax credits. Even if she were not your dependent, There are restrictions on a student claiming herself and getting the refundable portion of the American Opportunity credit.

[kyle-r-hannon]

Aren't some of the scholarships (room and board) taxable? If we simply fail to list the 1098-t on the child's form, won't that be a problem?

[Hal_Al]

kyle.r.hannon,
Yes, scholarships that pay room & board are taxable. Not listing the 1098-T is not a problem in such cases, as long as you know and enter the taxable amount. Many people don't keep good records, and have to rely on the 1098-T to determine the taxable amount (essentially box 5 minus box 1 or box 2)

Furthermore, there is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

[sunshine1]

Well, if Hal_Al is right then Turbo Tax should not have asked that question on my child's return after I had already stated that someone else will claim her.  This is not right of Turbo Tax to confuse people.

[tdurnil]

A year later and this is still confusing as ever. If the parents are taking the tax credit and report the 1098T on their return, where would the students taxable portion of the scholarship (income) get entered if the 1098T info isn't repeated on the students return?

[taxmom99]

My son has a full ride. His taxable scholarships are $8787.  Are you saying that I should add $4000 (the amount needed to get the full American Opportunity Credit) to the $8787, thereby increasing his taxable income?