Qualified Tuition Reduction Question

[donovant40]

I work full time at a college and get to take free graduate courses from the school.  I take the courses at night part time.  My 1098-T reflects the amounts in both Qualified Education ($5,820) and the Scholarship/Grants ($5,740) in Box 1 and 5.  Do I need to include the amount in Box 5 as income?  My W-2 did not include any income from the scholarship.  Also, box 9 "Check if Graduate Student" was not checked on my 1098-T.  I know that in the tax code the tuition reduction is tax free for graduate students if:

1) It is provided by an eligible educational institution

2) You are a graduate student who performs teaching or research activities for the educational institution. 

I qualify for part 1, but am confused if I qualify for part 2.  I do not teach or perform research for the college, I just work full time for the school, so not sure if that disqualifies me and I have to claim the amount as income.  Also, since box 9 "Check if Graduate Student" was not checked off, would that mean the school/IRS would not consider the courses as "Graduate Student", even though I have completed a 4 year undergrad degree.  The courses are also related to further my current job (not taking courses as a career change) .

[ThomasM125]

Since your scholarship income is less than your education expenses, you would have no taxable income based on the entries on your 1098-T form. So, I don't think the other questions matter much.

It is not recommended that you alter the information reported on a 1098-T, but you are free to answer the questions in TurboTax accurately based on your interpretation if you think the form 1098-T answers are misleading.

It sounds like you are a graduate student. The question regarding teaching implies that is what the scholarship income is being paid for, but I don't think that is the case here, you are probably being paid a salary for that, so I would think "no" on that issue.