turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Event: Ask the Experts about your refund > RSVP NOW!
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

1098-T Making Me Owe $3k in Taxes for Scholarship that Went Toward Tuition

Hi, I would really appreciate some help with this.


I paid for my Spring 2022 tuition in November 2021. My 2021 1098-T reflected this with box 7 checked:

Checked if the amount in box 1 includes amounts for an academic period beginning January - March 2022

 

Now, my 2022 1098-T has nothing in box 1 for tuition expenses but includes my scholarship in box 5.

 

According to the official IRS website, scholarships are not taxable if they do not exceed the price paid for tuition. This scholarship that is reported reduced the Spring 2022 tuition cost which I paid for in November 2021. I graduated that semester and did not submit a tuition payment in 2022.

 

How do I fill out the Turbo Tax form to reflect that this scholarship lowered a payment I did in 2021 for Spring 2022?

 

Do I have to pay taxes on my Spring 2022 scholarship even though it technically should not be taxable?

 

I really appreciate any help, thanks.

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

4 Replies
KrisD15
Expert Alumni

1098-T Making Me Owe $3k in Taxes for Scholarship that Went Toward Tuition

No.

Back in 2016 the IRS required schools to report what was PAID in the calendar year, not what was BILLED. 

(To clear up confusion just like you are having now) 

 

If the tuition was billed in December 2021, but the scholarship did not post until 2022, the expense and the scholarship should be on the same 2022 1098-T. 

Check your school account statement and track the scholarship. If it posted in 2022 and paid for tuition, use the link under Box 1 on the 1098-T screen in TurboTax "What if this is not what I paid the school" and enter what was paid. 

 

You will need to look at your last year's return and make sure you did not use that expense for a credit on your 2021 return if you are now using the same amount to offset a scholarship. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

1098-T Making Me Owe $3k in Taxes for Scholarship that Went Toward Tuition

You can only use payment made in 2021 on your 2021 return. See Pub 970 page 14..Prepaid expenses. 

1098-T Making Me Owe $3k in Taxes for Scholarship that Went Toward Tuition

I was billed for Spring 2022 in winter 2021. I believe this amount was included on my 2021 1098-T, however box 7 was checked to indicate it included payment for the 2022 semester.

 

Is there nothing I can do if I paid for the semester in 2021 but the school reported the scholarship in 2022 and no tuition expenses? The scholarship is included in the 2021 billing statement.

AmyC
Expert Alumni

1098-T Making Me Owe $3k in Taxes for Scholarship that Went Toward Tuition

The IRS has a worksheet to determine the taxable portion. Use it and keep it in case the IRS asks. Since the scholarship was used for tuition, I would deduct that amount based on Topic No. 421, Scholarships. The goal is to determine the amount not used on qualified expenses for taxability.

Bsch4477 uses the portion of the Pub that is for claiming credits. You are not claiming a credit, simply determining the taxable amount of the scholarship.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies