1098t help

Forum|Forum|1 year ago
March 24, 2025
1 reply
16 views

My son, whom I claim as a dependent, graduated in May 24 but also attended summer school after graduation for prerequisites needed in order to apply for med school. His 1098t box 1 only reflects the cost of summer tuition since Spring 24 was billed in Fall 23. Box 1 is $7600 and box 5 is $34k. After receiving his account print off from the school I see the school credited his account the amount he was to receive in grants and scholarships and then made a manual adjustment of the spring tuition once the grants/scholarships were received in January 24. He was refunded 6k from the school of the difference. Is he required to report the difference of box 1 and 5, almost $26k! , or just the amount of $6k that was refunded as overage to him as taxable income?

AmyC

Level 15

It depends. If the scholarship was not included in 2023, then it must be included in 2024. Usually, we find the scholarships and tuition get confused through the 4 years and graduates end up paying the difference. You may have added the scholarships in 2023 to offset the income. The IRS has a great brochure that explains how scholarships and tax credits interact.

You may need to review all the college years to figure out which scholarships were claimed against which tuition on what years. Tuition paid must stay with the year while scholarships will sometimes end up in the wrong year. At the end, it has to all be accounted for. You can only claim the education credit 4 times for AOTC and then it goes to LLC.

Reference: What You Need to Know about AOTC and LLC

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Janet and Anthony Author

Level 2

We have never claim the AOTC due to all qualified expenses being covered by the scholarships. He received 1098t in 2023 where box 1 was $59,992 and box 5 was $71,669. Box 7 was checked. He had no other income and I was told he did not need to file 2023 taxes because it was under the standard deduction. Note to add some of the scholarship was used for Maymester that he attended overseas earning some credits through his school which furthermore complicated things.

2024 1098t box 1 is $7600, box 5 is $34,197 and earned $6k in w-2 wages. Although box 1 shows the amount for the summer tuition, it was not paid by scholarships in box 5. He still

has an open balance owed to the school for over $5k and appears more than likely a hefty tax bill due to how the school reports and bills tuition and scholarships received. I agree he should probably pay taxes on the amount refunded ($6k), but my mind is not grasping how over $27k is considered taxable income for 2024.

Can you attempt to “dumb” it down for me?

KrisD15

Level 15

I’m just not grasping this and still feel something is wrong. His junior year he decided to take the max loan out to get some money as he was unable to work while interning, going to school full time while a student athlete. He also did a summer semester in South Africa. He only began receiving refunds then, But no where close in excess of what is being reported on the 1098’s. His school changed billing systems and it seems something is way off. I pulled all 1098’s he received over years.

2020 1098T- box 1 31,271.00, box 5 30,573.00

2021 1098T- box 1 64,026.00, box 5 61,220.00

2022 1098T- box 1 55,699.00, box 5 61,995.00

2023 1098T- box 1 59,992.00, box 5 71,669.00

2024 1098T- box 1 7600.00, box 5 34,197.00

If you think the 1098-T was not reported correctly, make an appointment with the school billing and/or financial aid office.

They should be able to explain everything and may even have advice on how to report the expenses. That's their job.

It could make a big difference with your tax liability.

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