1098-T does not reflect the true amount I paid to School

[lamthh]

I am filing my Tax return with my 1098-t form. The school tuition is $28,000 ($14,000 each semester) and the scholarship is $13,000. 

For the 1098-t form for the year 2022, my school shows the tuition in box 1 as only $3000. (They refuse to change it.) After checking my school payment activities, I realized I was asked to pay my tuition in Dec. 2021. But the tuition was paid for the Semester in 2022. 

What I truly don't understand is my school does not carry over the tuition I paid for 2022, but they carry over the scholarship they gave to me. So now, after putting the numbers in,  the scholarship exceeds the amount I paid according to the 1098-t form, ($13000-$3000=$10000) and I am taxed by this. I owe the states and federal together $600. 

Luckily, Turbotax has one option to check" What if this is not the amount I paid to the school" and after checking it,  I am allowed to enter the tuition I paid. But now, the state and federal will refund me $2000.

I am very concerned that if I manually entered the amount I paid in 2021, Dec., how could I explain this situation to IRS? Will they not consider it as my 2022 tuition, since I paid it in 2021 Dec.? 

Would you guys prefer me to stick to the numbers on the 1098-T and just pay the $600 to avoid potential penalties or interests from IRS??

Begging to be helped!! 

[KrisD15]

Looking at your scenario, did the school issue a 1098-T for 2021 and if yes, did you use it for an education credit on your 2021 return? 

Make sure you are not using the same expenses in two different years. 

If they charge 14,000 per semester and you receive a 13,000 scholarship, how did the school come up with 3,000 for box 1? 

Yes, if you have school statements that show what was PAID in 2022 is not what is reported in Box 1 of your 1098-T, use the link and enter what was paid. 

If you are eligible for the American Opportunity Tax Credit, that is based on UP TO 4,000 expenses and worth up to 2,500. 

A 2,500 credit could very well result in a 2,000 refund. 

The credit is meant to help students pay for school, so do not hesitate to take the credit if you are eligible. 

Pub 970 

[lamthh]

Hi, thanks for your reply!

My school did issue me a 1098-t in 2021 and they told me they put the tuition I paid in that year, since the payment was made in 2021 Dec. However, I didn't get any education credit last year, even though my box 1 payment number is much higher than the box 5 scholarship number. (I didn't work that year, so maybe that was the reason.)

The $3000 for box 1 was other printing and lab fees they charged and it is reflected on box 1, for the 2022 1098-T form. 

I do have school statements saying I made the payment of my tuition for 2022 in 2021, Dec. with the specific amount. But again, the payment was made in 2021 though... Even though it says it is for the Spring semester in 2022, I am not confident if the IRS will take this into consideration. 

So am I still allowed take the credit? if so, do I make any changes to my 2021 tax return, since my school put my 2022 tuition amount to that year, 2021? 

Please let me know!

Many thanks!

[KrisD15]

No, 

originally I read that you were BILLED in 2021 but paid in 2022. 

No, you can only claim what you PAID in the tax year, so only what you paid in 2022. 

Let's talk about 2021, were you claimed as a dependent? 

If you didn't work, who supported you? Perhaps your parents should be claiming you and getting the Education Credits. 

Was 2021 your FIRST year at school? 

(It does not sound like it was your first year in 2021 since you say you had a scholarship in Box 5 on your 2021 1098-t as well)

What was in Box 1 and Box 5 of your 2021 1098-T? 

Why did you not get a credit on your 2021 return? 

Look at line 29 on your 2021 1040 and look to see if Form 8863 was included. 

Now lets talk about 2022. 

You say each semester is 14,000 but Box 1 on the 2022 1098-T only reports the 3,000 lab fee, so did you only go to school for the one semester total? 

If you are saying that you went to school for only the first three months of 2022, and the tuition was billed and paid in 2021, but the scholarship posted in 2022, 

DO NOT CHANGE BOX 1 on the 1098-T screen (because you did NOT pay in 2022).

You COULD however select that the scholarship was for a different year, if in fact the 13,000 was for the tuition billed and paid in 2021. 

If your 2022 1098-T shows 3,000 in Box 1 and the 13,000 scholarship can be allocated to 2021, you can claim the remaining 3,000 towards a credit, but it depends on what you reported on your 2021 return. 

According to the IRS:

“If you pay qualified education expenses in both 2021 and 2022 for an academic period that begins in the first 3 months of 2022 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2022 instead of reducing your expenses for 2021.”

"Will they not consider it as my 2022 tuition, since I paid it in 2021 Dec.? "

No, not for a credit. For a credit the tuition must be paid that same tax year. 

You can, however, allocate a scholarship or refund to the prior year,