1098t help

Forum|Forum|1 year ago
March 24, 2025
1 reply
8 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

Thank you for your response. I think at this point, he needs to file for an extension to allow us some time to get with the school. They haven’t been very helpful via email.

An extension will give you more time to sort things out, but remember that if there is a tax liability, that needs to be paid by April 15th or penalty and interest may be applied.

You can always send a payment in with the extension and later get any over-=payment back as a refund.

HERE is the link to file an extension

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