Since you are claiming your daughter as a dependent, then you (the parent) should enter the 1098-T on your return to claim any education credits (like the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC)).
- Open or continue your return.
- Under Federal tab, Click on Deductions & Credits.
- Under Education section, Click on Start/Revisit next to Scholarships, student loans, tuition (1098-E & 1098-T).
- Even if your daughter paid for the tuition herself (or used her own money), the IRS treats those expenses as if you paid them for the purpose of the credit.
Your daughter might need that 1098-T information on her own return if she has taxable scholarships.
Look at Box 5 (Scholarships/Grants) and Box 1 (Payments received). If the amount in Box 5 is greater than the amount in Box 1 (plus other required expenses like books), the excess is considered taxable income
If she is required to file her own return because she earned enough income, she must report that excess scholarship amount as income on her return (even though you are claiming the 1098-T for the credit).
Note: When you enter the 1098-T on your return, the program will ask if the student is your dependent... after you say "Yes," it will guide you through calculating the credit. If she has taxable scholarship income, the software will usually notify you that she needs to report that on her own separate filing.
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