Tax Year Prior to 2020: Are you required to file your 1098-T form?

[mdin]

I have had the same situation with box 5 being a greater amount than box 1 due to a scholarship that included tuition and a stipend for books.  I found that If you enter your 1098T amounts in turbo tax it will first calculate that you owe tax on the difference between the 2 numbers, because it has identified that you received more than you paid.  If you continue to follow the prompts it will then ask you if you used this money for books/related materials.  If the difference between the amount in box 5 minus the amount in box 1 is a positive number and you spent all of this on books/materials, and you kept record of this, then you should not be taxed on this "extra" amount.  It will be offset when you enter your expenses and your tax due should decrease again to what it was before you input the 1098T amounts.  For some people, if your expenses are even greater than that difference, you could qualify for a credit. If, however, you had no books or materials costs, then that amount difference will be taxable.  Any amount you spent on room and board are not considered expenses you add here.  However, if you withdrew money from a 529 plan, you can use that money for room and board expense. Hope that helps!

[Bekher]

Thank you so much. I did the exact thing and you are correct. 

[pcdoctor554]

I am confused myself.  I too received a 1098-T form and the amount in Box 5 is more than Box 1.  I put the amount I received in Box 5 where it says Other Scholarships/Grants/Fellowships.  But then when I go to the next page, I get something like this.

https://i.gyazo.com/e00ed1d7e0451bc5a6596e337ce40464.png

In an earlier post that I read, it said that I could subtract Box 5 from Box 1 and if the amount I receive is a positive amount, I could enter the amount in that box.  But is this the right thing that this person was talking about?  Now when I tried entering it, it raised what I would get back, but not to the amount it was before I entered what I received in scholarships/grants.  I received the Pell grant from financial aid.  So when it asks "Did Your Aid Include Amounts Not Awarded for 2019 Expenses?" I really don't know how to answer that as I'm not sure.  Please let me know what you think I should do.  Should I subtract box 5 from box 1 and enter the amount in scholarships, grants or fellowship that was not designated for the 2019 expenses?  Please let me know.

Thanks

[ThomasM125]

You should enter the amounts reported on your form 1098-T in the corresponding boxes in the form 1098-T entry screen in TurboTax. You should not adjust those numbers, unless they are incorrect.

For the question about the scholarship aid, you are being asked if the scholarship reported on your 1098-T form for 2019 was used to pay the expenses reported in box 1 of your 1098-T form.

Sometimes, the tuition will be reported to you in one year, but the scholarship money used to pay it will be reported in the next year. If that happened in 2019, then you will be asked to enter the amount of the scholarship money that belonged in the previous year.

[pcdoctor554]

I didn't use any of my own out of pocket money to attend college.  The Pell Grant covered it.  How it works is the college will give me a total of what it would cost for me to attend and then if the pell grant I'm given for a semester is larger than what I would pay to the college, then the college refunds me back what I didn't have to pay from the pell grant.

[Thomes]

Login to your schools bursars office or student financial account online.  Add up all the scholarship/grant/fellowship awards that you received for the spring semester 2019 and fall semester 2019 or just fall semester if that was the only semester attended.  In your case it sounds like you only have the pell grant and no additional scholarships, etc?? So add the amount of scholarships/grants for semesters attended in 2019 and see if that number matches what is reported in Box 5.  If it does, then your aid didnt include amounts not awarded for 2019 expenses. Sometimes a college will report an amount in Box 5 that will be awarded to pay expenses in another year.  For example, a college could include an amount in Box 5 that is awarded to pay for tuition expenses for the spring 2020 semester on your 2019 1098T.  

[wolltdzv]

I'm doing my Grand daughter's tax She is a dependent on her parents return. Does she file the form or do her parents who pay for her college?

[pcdoctor554]

All I received was the Pell Grant.  No other grants/scholarships.  And whatever I don't use of the Pell Grant for a semester, it gets refunded to my bank account.  Now I've also read that if one uses the money solely for school, then there's no taxes, but if they use some or all of it for things other than school, then it's taxable.  Is this true?

[KrisD15]

That is true. 

IRS Pub 970

[tracy96]

I am having similar issues. After submitting my 1098T form, it took a significant amount of my refund away because box 5 was greater than box 1. That's fine. But I am now having to wait for Tax form 8615 to become available... will I be taxed an even greater amount after this? or is this form just a formality? thanks. 

[macuser_22]

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@tracy96 wrote:

I am having similar issues. After submitting my 1098T form, it took a significant amount of my refund away because box 5 was greater than box 1. That's fine. But I am now having to wait for Tax form 8615 to become available... will I be taxed an even greater amount after this? or is this form just a formality? thanks. 

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It is not optional.   Scholarships in excess of tuition is taxable income.  It would be tax evasion  to intentionally leave taxable income off of your tax return.

[VictorW9]

@tracy96 The form 8615 has nothing to do with your education credit. It has to do with reporting unearned income for children who have been claimed as dependents on their parents tax return. It used to be known as kiddie tax.

[macuser_22]

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@VictorW9 wrote:

@tracy96 The form 8615 has nothing to do with your education credit. It has to do with reporting unearned income for children who have been claimed as dependents on their parents tax return. It used to be known as kiddie tax.

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I believe the poster is saying that entering the taxable scholarship is triggering the 8615 form since a taxable scholarship (not reported on a W-2) is unearned income for the purpose if the "kiddie tax".

[nancydave590]

A clarification question: As parents, we claimed our daughter and for the last four years, we have included her 1098-T on our return (hopefully this was the correct thing to do). This last 1098-T she received covers her spring semester prior to graduation in 2019. We have already used up our four years of education tax credits so TurboTax says we don't qualify for one this year. However, on her 1098-T, box 5 is more than box 1 -- so whose return does that go on? Our daughter's return? Or ours?

[macuser_22]

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@nancydave590 wrote:

A clarification question: As parents, we claimed our daughter and for the last four years, we have included her 1098-T on our return (hopefully this was the correct thing to do). This last 1098-T she received covers her spring semester prior to graduation in 2019. We have already used up our four years of education tax credits so TurboTax says we don't qualify for one this year. However, on her 1098-T, box 5 is more than box 1 -- so whose return does that go on? Our daughter's return? Or ours?

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The scholarship income is the child income so must be on the child tax return.