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mojo03
Returning Member

two 1098T and qualified expenses vs taxable income

We are claiming our daughter as a dependent on our tax returns. My daughter attended a university in NC fulltime in 2023 and received a 1098T.  This 1098 T in Box 1 has $8364 and Box 5 $2500. She also attended a summer program at a university in Michigan where all of the tuition was covered by scholarship and there was a stipend of $1200.  The Michigan 1098T  box 1 shows $2700 and Box 5 shows $3900.  She has a 529 plan that was used to cover her non scholarship college expenses.

 I have entered everything into turbo tax and do not see the $1200 " stipend" amount coming up as income on her return. I am wondering if this is because if you add the 1098T form numbers together that the total scholarship amount ($3700) is less than the total qualified expenses (approx $11,000)?  Should she claim the $1200 stipend as income to possibly avoid taxes on part of the 529 withdrawal? The 529 funds were withdrawn in the parents name.  If we do this, how to we get the $1200 to show up as taxable income on our daughters taxes and then what do we need to do on our taxes to reflex the situation

One other question, does the 1098T from Michigan mean that my daughter would need to file state taxes in Michigan? She will file state taxes in NC where she is a resident. 

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1 Reply
AmyC
Expert Alumni

two 1098T and qualified expenses vs taxable income

1. Correct. The scholarships are less than tuition so there is no taxable amount.

2. No, she does not need to claim the used scholarship income.

3. There is no need to file a MI return since the MI income is below the filing limit. MI-1040 Book with forms

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