Did you use scholarship 1098t to pay room and board?

[CC122]

What do I put in the question Did you pay for room and board ? In my 1098t box 1 is  8328 .78 and in box 5 $9806.00 . I want to use the AOTC .  I also paid for other books and supplies that total $2200.00 ?

[KrisD15]

Scholarship used for room and board will be taxable income and the remaining excess education expenses will be available for an Education Credit. 

You have 10,529 expenses and 9,806 scholarships. 

That leaves 723 expenses over scholarship. 

If you want the full AOTC, which maxes out with 4,000 expenses, you would claim that 3277 was used for room and board. 

You'll be taxed on 3,277 and also get the credit. The credit is USUALLY worth more than the tax on the additional income.

When you enter Form 1098-T and continue through the interview, you can select "Maximize my tax break".

At this point the program may suggest you claim some of the scholarship as income, or you can take it upon yourself to allocate it to room and board to make the scholarship taxable and free up the expense.