1099-Q and excess scholarship for college student

[jamdeuce]

My 22 year old daughter is a full time student at the University of Oregon. She moved out of the house in August, 2025 and received 5 payments of 1455.00 in 2025 for room and board from a 529 plan that

I opened for her when she was a baby. She also received a 2000.00 distribution

from another 529 plan earlier in the year. The "cost of attendance" for the Univ of Oregon on their website is 13095.

On her 1098-T, tuition and fees for 2025 were 12372. She received scholarships for 22667. She worked just a bit

and her w-2 box 1 is 5680.  She paid 80 in federal taxes and 428 in Oregon state taxes as well as 1400 in interest and dividends.

She will be filing her own returns this year. I've scoured the internet - ChatGPT, Grok, and Gemini to find out how the best way to fill out her returns and also shift up to 4000 in scholarships to income so I can claim the AOTC on my return.  Way too much conflicting information. So, I thought I'd come to the source.

Should she list the 1099-Q forms on her return, if needed? How does she shift money from her scholarship to "income" on her return? Would she list her 1098-T information on her return, or my return? 

We both would appreciate any information that you folks could provide. We are using TurboTax Premier Windows Desktop edition for 2025 tax year.

[AmyC]

Let's start with the 2 Qs. All of the 529 money went towards room and board or maybe all but $2k, see more below. Those are not filed if nothing is taxable.

Next, you may be able to claim your student as a dependent. The temporarily away from home expenses were covered by the 529. Here is a  support worksheet. A student is considered to live at home for the year even while temporarily away for college. The IRS has a quick online quiz to determine who gets to claim, see Dependent. Whoever claims the student, claims the education credit. Usually, students don't have enough income to do them any good. Under age 24 and full time student is not restricted by earnings for dependency.

The bursar numbers can be used since they are higher but you would want to determine why there is a discrepancy. If you decide to use the numbers from the bursar account, make a copy of it to put with your tax file to make a statement, in case the IRS asks. The 1098-T is considered an informational form and not necessarily accurate.

AOTC is only good for 4 years and at age 22, you may have already used it 4 times so be sure to check. The IRS does a fast audit if you try a 5th time. There is a lifetime learning credit available once the 4 years of AOTC are done.

Now for the 1098-T. Box 1 $12,372 and box 5 $22,667.

• If you are claiming student
  • you enter 1098-T with box 1 of $4k and box 5 empty.
  • Student will enter 1098-T with box 1 of 12,372-4000 used on yours =$8372 to enter and box 5 is the full amount. Be sure to add any other educational expenses, book, supplies, etc.
  • The scholarship is a hybrid income and does count towards the kiddie tax. See What is the Kiddie Tax?
• If the student is claiming the student, enter the 1098-T as-is along with other expenses.

 The 1099-Q for $2k - if it wasn't used for room and board, it is used for education and must be counted. You have of two ways:

• Enter the 1099-Q and let it be part of the return or
• Consider it as going towards education costs and tuck it away. Then, the amount for education expenses in box 1 will need to be reduced by the $2k from the Q. Again, be sure to include all extra books, supplies, etc.

[jamdeuce]

Thank you! This information is very helpful!