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pallakr
Returning Member

1098-T

My dependent undergrad daughter  worked last summer and has to file  taxes.

I did Virginia Prepaid for child 

We get 1098-T in student's name  and she got some scholarship amount

Should she include this in her tax return or should I ?( I still claim her as dependent)

We did   her  taxes(not Filed yet)  with and without the 1098-T info  ---it does not make any difference in return

Thanks in advance 

5 Replies
MaryK1
Level 9

1098-T

If your daughter does not have taxable scholarship income, you do not have to report the 1098-T on her tax return.  It is only taxable if the amount of her scholarship combined with the prepaid tuition was more than the total tuition and qualified expenses or it was specifically used for room and board or other nonqualified expenses.  Just keep a copy of it with your 1099-Q with your tax records.

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abcdefghijk
Level 1

1098-T

MaryK1- I have a question. I have a child with prepaid tuition and scholarships used for room and board. and fees and books. 

 

Is this correct, 1098-T goes on the parents return (student is a dependent), where does the 1099-Q go? 

 

Taxable scholarships are noted on parents return but reported on the students return. SCH will show up on 1040 for the taxable portion on the students 1040. box 1 of 1098-T says  8534 and box 5 says 11782.33. It is my understanding all of the 11782.33 is taxable except the mandatory fees which was only like $600 and books since most of box 1 was prepaid tuition. Can you get the AOTC if most of the scholarships are taxable used for room and board etc? Thanks so much 

MarilynG
Level 11

1098-T

For most qualified education program beneficiaries, the amounts reported on the 1099-Q aren’t reported on a tax return.  If the prepaid tuition distribution was used only to pay for qualified education expenses, the amount in Box 1 on the 1098-T is considered to be paid by you. 

 

You are correct that the excess scholarship amount is taxable (difference between Box 1 and Box 5), offset by any other expenses you add that are not included in the Box 1 Tuition amount on the 1098-T (books and fees). 

 

You would not be eligible for AOTC since the 1098-T indicates that you received more scholarship than you paid.  Only prepaid tuition distributions can be used for room and board. 

 

Here's a more detailed Guide to IRS Form 1099-Q.

 

 

 

 

 

 

 

 

 

 

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NCperson
Level 15

1098-T

The 1099-q gets reported by whomever social security number is on the form 

 

if box 1 on 1099-q exceeds 1099-t box 1- minis box 5 plus room, board and books, part of the box 2 earnings on the 1099-q are taxable . TT will figure this out 

abcdefghijk
Level 1

1098-T

Mary replied to my question with this- For most qualified education program beneficiaries, the amounts reported on the 1099-Q aren’t reported on a tax return.  If the prepaid tuition distribution was used only to pay for qualified education expenses, the amount in Box 1 on the 1098-T is considered to be paid by you. 

 

You are correct that the excess scholarship amount is taxable (difference between Box 1 and Box 5), offset by any other expenses you add that are not included in the Box 1 Tuition amount on the 1098-T (books and fees). 

 

You would not be eligible for AOTC since the 1098-T indicates that you received more scholarship than you paid.  Only prepaid tuition distributions can be used for room and board. 

 

Here's a more detailed Guide to IRS Form 1099-Q.

 Marilyn- your reply, you stated Only prepaid tuition distributions can be used for room and board. 

 

Our prepaid tuition can only be used for tuition, nothing else and his scholarships were almost all taxable because they were used for room and board. 

 

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