We claim my daughter in our tax return. She also files her taxes acknowledging that she is claimed as a dependent in our tax return. She received a 1098-T form … Do both of us have to enter the 1098-T information in our tax return ?
You use the form for education credit if otherwise eligible. Unless she has scholarship amounts greater than expenses she doesn’t have to do anything with the form
Thank you for response. Her scholarship amount is greater than her expenses …
@Carl has an excellent discussion of this issue so I paged him to weigh in. You can maximize your education credit by claiming more expenses and have your student claim more scholarship income resulting in a better benefit for you.
Meaning that she enters the 1098-T info into her tax return and not me … ?
She has minimal expenses (a couple of books ) bc at the time that she was attending school she was living at home.
She would file it and the difference between expenses and scholarship is income to her. Expenses include books. But there is a way for you to claim you paid $4000 of the tuition expense and have her claim $4000 more in income from the scholarship which for American Opportunity Credit generally means more money for you.
Thank you. I also read Carls’ discussion and it was as much help as yours.
Nuna,
Perhaps the practical answer you were looking for is that you use the 1098-T for your, the parent's, return. Your daughter needs to include scholarship income that exceeds qualified educational expenses that the scholarship paid. The discussions around reducing the amount of qualified educational expenses that are considered paid by the scholarship may be helpful in letting you achieving some or all of the maximum educational credit on your return in exchange for possibly adding some smaller "kiddie tax" on part of the scholarship to your daughter's return. There is actually an online tool Education Benefits Calculator which can aid in this optimization.