1099-NEC Scholarship 1098-T 1099-Q

[masonparent]

Thanks @Hal_Al 

so sorry below I made a typo,

How much taxable income does the student have, from what sources: intern $5000 this number should be $7200

but it seems won't change below as the total is still below $12950.

$2425 + 5000 (intern income) = $7425 total student income.  This is less than the $12,950 filing threshold, so she will still owe no tax. 

[Hal_Al]

Q. It seems won't change anything, as the total is still below $12950?

A. Yes

$2425 + 7200 (intern income) = $9625 total student income.  This is less than the $12,950 filing threshold, so she will still owe no tax. 

[masonparent]

@Hal_Al Thanks so much for your help!

Now for the same question for me as parents joint return

It asked was any of your financial aid already included as income,

when 1098-T is full amount $6750

I have to enter Yes

Yes, I had scholarship or other aid reported on a Form W-2 or Form 1099-MISC

I answered yes and entered the $5000 as how much of box 5 was already reported as W-2 or 1099-MISC, now I get the most refund. But since I did not have 1099-MISC and the 1099-NEC was for my daughter, I need an different way,

So I tested lower the box 5 in 1098-T to 4,325 (took away what was split to my daughter return1098-T, as we discussed earlier) now I can just answer No to the question(was any of your financial aid already included as income) and I still get the max refund. I like this option better.

[masonparent]

just fyi, so far I did not delete the 1009-Q from my return(parent's) yet, may be that has some impact. 

also I saw this link, that  says " the information on a 1098-T can not be split between 2 returns" but I am not sure what is the source/IRS publication that says so. We are just trying to split box 5 not box 1.

https://ttlc.intuit.com/community/college-education/discussion/unfortunately-the-information-on-a-10...

[Hal_Al]

That link is just somebody's opinion, not an IRS reference.

You cannot split box 1 simply means only one person can claim the tuition credit (not both the parent and the student).  The "splitting" of the 1098-T is just an information entry device in TurboTax. 

Q. "Now for the same question for me as parents joint return. It asked was any of your financial aid already included as income"

A. TT doesn't use that for anything on your return.  It's trying to be helpful by giving you an indication, if any, of how much scholarship the student might need to report as income, on her return.   We already know that. Don't get bogged down in extraneous issues. 

Here's the simple version: on your return enter the 1098-T with $4000 in box 1 and 0 in box 5.  Enter no other numbers. The $4000 QEE, to claim the tuition credit, is the only calculation needed. 

[masonparent]

Thanks so much for your help! If it makes no difference, I would just keep 1098-T box 1 to be full amount and box 5 to be  4,325, since that way I can explain where the numbers comes from.

So in summary on my return in order to get education credit AOTC, we need to move part of the scholarship of 1098-T to my daughter return. In her return we had to enter negative amount in Less Common Income to zero out the 1099-NEC.

Thanks so much for your time and help!

[Hal_Al]

Q.  So in summary on my return in order to get education credit AOTC, we need to move part of the scholarship of 1098-T to my daughter return.

A.  Simple answer: yes.

Q. In her return we had to enter negative amount in Less Common Income to zero out the 1099-NEC.

A.  Yes.  

But, that begs the question, where did you enter the 1099-NEC  It should also have been entered in less common income as a positive number. 

[masonparent]

I entered 1099-NEC in my daughter return in below section since it specifically has the wording about 1099-NEC and it shows IRS I entered this form. 

wage and income

-1099-MISC and other common income

-income from Form 1099-NEC

My concern about entering it in the below, is that it is not specifically for 1099-NEC, and I can only enter word 1099-NEC in a description, if I enter it here, does IRS knows I entered 1099-NEC?

wage and income

Less Common Income

- Miscellaneous income, 1099-A, 1099-C

- other reportable income

I only entered the negative 5000 here.

Is this correct?

Thanks again for your guidance!

[Hal_Al]

Q. My concern about entering it in the below, is that it is not specifically for 1099-NEC, and I can only enter word 1099-NEC in a description, if I enter it here, does IRS knows I entered 1099-NEC?

A. Yes. In fact line 8z of Schedule 1 one of the few places you can identify it as 1099-NEC income, by entering word 1099-NRC.  Entering it in TT's 1099-NEC section does not guarantee that. 

Where on the actual forms did the 1099-NEC income end up?  

[masonparent]

so I should move it to below place? 

wage and income

Less Common Income

- Miscellaneous income, 1099-A, 1099-C

- other reportable income

or keep it under

wage and income

-1099-MISC and other common income

-income from Form 1099-NEC

sorry I am not sure where line 8z of Schedule 1 comes from, or corresponds to which option above, this is new to me.

[masonparent]

so far form shows below, schedule one on my daughter return

[Hal_Al]

That's good! It's in the right place. 

[masonparent]

this is also on daughter return

[Hal_Al]

That too is good.  That's where it's supposed to be

[masonparent]

@Hal_Al Thanks so much for your time and information, very helpful!