Who enters the 1098-T on their return my son or me (parent)?

[sheshe2]

I'm still confused, I understand what you're saying. 

Okay so if I did this it would change my box 1 for 2020 by -$18,780 making it equal $23,797. Correct me if I'm wrong but if the college included the Spring of 2020  in 2019 on  form 1098-T then I can't use that on taxes this year like you're telling me to.

[KrisD15]

I have read your previous post and it seems that you are concerned with getting a 2021 1098-T posting the scholarship with no expenses. 

What you say as the school's response makes no sense since Box 1 reports what was PAID, NOT what was billed. 

Reporting changes on the 1098-T (using Box 1 rather than Box 2) happened back in 2016 so that this confusion would no longer be an issue. 

The Education Section in TurboTax allows you to adjust the numbers, but you need to know what the numbers are, we have no way of knowing that. Please look over the student's school account statement for the year. You are concerned with WHAT WAS PAID to the school for tuition and fees in 2020. 

Once you have that number enter the 1098-T and if the amount in Box 1 needs to be adjusted, use the link under Box 1 on the 1098-T screen that reads "This is not what I paid" and enter the correct amount in the adjustment box. Next year if the 1098-T shows a scholarship that paid for tuition that was posted on the 2020 1098-T, but paid in 2021, again use the "This is not what I paid" link and enter that amount. It is possible that the school might not send a 2021 1098-T in which case you won't need to report it at all. 

As MaryM428 stated, you can pay in either year for classes tat start in the first three months of the year, however they only count towards a credit for the tax year in which the expenses are actually paid. 

Keep a copy of the student's statement and 1098-T with your tax file. 

IRS Pub 970

[sheshe2]

Okay,

Maybe this is relevant -  In 2017 her first year started in fall they reported  in box 2 for both fall and spring and in box 5 just for the fall they did select box 7 on this 1098-T also but no other except 2020.

Jumping forward to your advice the statement says Spring 2021 is billed on Feb.1st 2021 with the full balance remaining. No scholarships or grants showing as of 2/1/21 and that's as far as the statement goes that they gave me. 

It shows 2020  with box 7 checked

Box1  $42,577 college says it's for Fall 2020, Summer 2020, and Spring 2021

Box 5 $33,114

We have been able to claim the American Op Credit for 3 years. I just don't want to enter anything wrong or create tax when there shouldn't be any.

Thank you

[MarilynG1]

@sheshe2 Your current 1098-T would qualify for an education credit, since the Box 1 amount is larger than the Box 5 amount.

However, since Box 1 also contains tuition paid in 2020 for 2021, you can adjust the amount by checking 'this is not what I paid to the school' and enter only the amount that applies to 2020 tuition.   The IRS does have a copy of the 1098-T with Box 7 checked.

It often 'comes out in the wash', though.  If entered 'as is' you may get more of a credit in 2020, less in 2021 (or no credit)  when Tuition amount on 2021 1098-T will only reflect payments made in 2021, and may be less than Scholarships in Box 5. 

You may want to verify that the Box 5 amount is only for 2020, and doesn't also include 2021 scholarships (not common). If it does, though, you can also adjust the Box 5 amount when you enter your 1098-T so that the Tuition amount for 2020 'matches' Scholarship amount for 2020. 

Click this link for more info on Form 1098-T with Box 7 Checked. 

[sheshe2]

I appreciate your response but I'm assuming you didn't read all my posts. My daughter is graduating in May. I laid the information out clearly for the last tax export to respond. I apologize I'm new and thought it would be an ongoing conversation so she would still be on the same page.

[AmyC]

Your situation is common, scholarship left and no expenses. The AOTC is only good for 4 years and this will be your last year claiming it. That said, if you want to move some of the education expense to next year to reduce the income, you can. Your child may have taxable scholarship income next year and hopefully a job.

[kkRizzo23-1]

@Carl  Thanks so much for your high attention to detail, Carl. Question for you - you said to @vmi9d3  on March 2, 2020 - 

"Your off campus R&B was not paid with any scholarship money, because you don't see any application of that scholarship money to the off campus living expenses, anywhere in the student's on line college account in the financials section of their account. It's an out of pocket expense any way you look at it. That out of pocket expense for R&B is not reported anywhere on any tax return."

I just want to clarify / make sure this is true in my case. I was a full time student but lived off campus (adult, renting). I received $13,690 in scholarships and grants for 2020.  My tuition costs were $8772 - that's what I paid the school for 2020 before they reimbursed me with scholarship disbursements. 

Question 1: Do I take $13,690 - $8772 = $4918, and say that that $4918 is how much was spent on 'room and board' since I didn't use it to pay tuition? As it was in excess of tuition? 

Or, as you said in the scenario above, do I just consider my 'room and board' out of pocket expense, since there's no record of it being paid to an entity or the school, and report the scholarship information as the $13,690?

I did pay off student loans during 2020 as well, so the scholarship money technically could have gone towards that rather than room and board.

Question 2

Caveat, I paid $2987 of that tuition in 2019, for the upcoming semester. I'm a little gummed up in the "irs works in calendar years, schools work in academic years" I tend to think in academic - this $8772 was how much I paid for my schooling for 2020, including a payment made in 2019. That would mean my actual payments IN 2020, but not for it, were $8,772 - $2,987 = $5,785 - if I'm going by calendar years. Is that correct?

So then, is that number what I would report as my tuition payments, not the $8772 or the Box 1 $6458?

My school reported in Box 1 of 1098 T - Payments received as $6,458, with an adjustment made for a prior year (Box 4) of $865. No matter how I crunch the numbers thus far, I can't figure out how they got that number. But, on my actual financial account activity with the school, I have record of paying $8,772 for tuition and related fees. My only guess is that they have certain fees that are part of enrolling for each semester that students can later ask to opt out of & be reimbursed for (they are minimal, I think there's only one line item). But they are lumped in with all the typical enrollment fees alongside tuition.

Question 2: Do I report the $8772 as my tuition payments, or do I report the $6458 that the school lists?

Or do I report the $5785 that are my actual payments in 2020, not my payments for 2020 school year?

Thanks so much for your help. Really appreciate the gifts of the thorough who take joy in understanding this stuff, and explaining it to us, to the benefit of the rest of us. I'm in circles over it.

Best,

[AmyC]

1. You want to leave $4,000 as education expenses you paid in order to claim the AOTC, if possible. Scholarship $13,690 minus room and board - rent and food = how much?

Then education cost of $8772 minus what was left of the scholarship.

For example:

Scholarship $13,690 minus R&B of $10,000 = $3,690 towards education expenses.

Education costs $8772 - $3690 paid by scholarship = $5,082 paid out of pocket for college to claim the AOTC.

2. The 1098-T says $6458. If you reported the other money paid in 2019, you certainly can't deduct it again. What did you do in 2019? Your record of $8772 was all in 2020? If so, then count the qualified expenses. You only get to deduct money paid once, pick a year and stick with it.  See Publication 970, Tax Benefits for Education.

Related:

Qualified Expenses 

Available Education Credits

IRS Q & A about education credits

[marshall_drez]

Hi,

I am curious how or if to report a 1098-T for my son if not claiming him this year as a dependent. I am in charge of his 529, and his father and I take turns claiming him on our taxes. 2020 was his father's year, but I have made all the withdrawals for his college. Also, what is the maximum amount per year and how does Summer school impact this amount?

T.I.A.

[AmyC]

First, if all of the 529 went to qualified education expenses plus room and board, you can delete the form 1099-Q.

Room and board is not a qualified expense for AOTC, but it is a qualified expense for the 529. For full details, see 529 for Room and Board. Did all of it go to room and board? 

• Yes - delete the 1099-Q
• No - the 529 was bigger than all of the above expenses. The amount beyond room, board, tuition, books, etc is taxable.

Example of no- but went to qualified expenses:

• $15,000 529 distribution. $12,000 went to room and board with $3,000 towards tuition, books, etc.
• 1098T shows $12,000 tuition. Plus you have additional expenses of $1,000 for books and miscellaneous.
• The 529 paid $3,000 towards the tuition and books. If we subtract the $3,000 from the amount paid for tuition and books, we have $13,000- $3,000 = $10,000 actually spent out of pocket.