Education Credit

[sharkcait]

So I took the spring 2021 semester off. My 1098-T Box 1 includes payments made for fall 2020 and spring 2021, which is about $25,000 in total ($25,000 for fall 2020 and then $0 for spring 2021 which is the semester I took off) Box 7 is checked off.  But Box 5 is including scholarships from the calendar year of 2020, so spring 2020 and fall 2020, which is about $36,000. So to put it simply my scholarship amount is well over how much I paid in tuition. I can no longer qualify for any education tax credit because of this. Plus I am now being taxed on the $11,000 difference because it's considered income. This is not a mistake by the institution, this is how they've reported previous years payments. But because I didn't pay for spring 2021 it's made it seem like I have earned money from attending my college which isn't true. How can I ensure that I'm getting the best return given this scenario?

[DianeW777]

What happened to the extra money that was not used for college expenses since you did not attend the spring 2021 semester?  Once we establish that information we can provide a more clear answer.

[sharkcait]

There wasn't extra money so to say. The $36,000 in scholarships is $18,000 for spring 2020 and $18,000 for fall 2020 both semesters I attended school and paid tuition. But my spring 2020 tuition payment was on my 2019 taxes. Like how my spring 2021 tuition payment is on my 2020 taxes. My school calculated Box 1 from payments for fall 2020 and spring 2021. But Box 5 is calculated based off of scholarships from fall 2020 and spring 2020. 

[DMarkM1]

You'll edit your "Education (1098T) entries and then "Edit" the "Scholarship and Grants" line.  There you will find a question that asks if the scholarship money was used to pay for tuition not in 2020.  Since it was used to pay for tuition that is not on your 2020 1098T you would answer "yes" and put in the amount no used to pay for the 2020 1098T tuition or other education expenses in 2020.

Click the "learn more" hyperlink for more information on moving the scholarship money to another year.  You may need to check your 2019 return to see that the scholarship money you are moving from 2020 is used on your 2019 return.  

Basically, your 1098T has tuition amounts for fall of current tax year and spring of next tax year but your scholarship is for the spring and fall of current tax year.  So you need to move the scholarship reporting to the correct year of your 1098T.