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What tax form is issued for scholarships?

WantWhatsBestWantWhatsBest Registered User Posts: 94 Junior Member
I know we have a taxable scholarship because it’s being used for R&B. Is the 1098-T the only form a school provides, or should there be a 1099 I need to look out for? If it’s 1098-T, it’s not super clear where the scholarship is listed. It’s rolledup into another amount I think.

And since I’ve read multiple times that the 1098 T is used to figure tax credits and deductions, and I’m simply trying to report taxable portion of scholarship, my guess is that this amount is not officially singled out or reported in a separate box anywhere. And therefore I would just list it as imcome on the specified line, much like you would for cash tips if you are a waiter. Right?
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Replies to: What tax form is issued for scholarships?

  • Momma2018Momma2018 Registered User Posts: 408 Member
    Scholarships paid directly to the school should be in box 5
  • WantWhatsBestWantWhatsBest Registered User Posts: 94 Junior Member
    Box 1 shows payments received. Box 5 shows scholarships and grants. There is a difference between the two showing about $1100 more in scholarships received than the amount of payments received. Is this the taxable amount? Further, I can't figure out what this is referencing because there was nothing "extra" received. Everything was zeroed out on the bill. We were billed for X amount and credited with waivers/scholarships -- and the balance of Y was paid for by me. I'm really confounded by this. I called the school hoping they could help break this down for me, but they basically say they can't and turn it over to your tax professional. Which, by the way, I did and he asked me why I thought any part of the scholarship was taxable. Super confused.
  • WantWhatsBestWantWhatsBest Registered User Posts: 94 Junior Member
    I forgot to add that the 1098 T amounts reflect fall 2018 and spring 2019. Further confusion. I really do not know what to report. I am tempted to just instruct tax person to include $1750 of scholarship as income (b/c it's being used for room and board -- it's marked that way on the bill and that's what it is) .. and call it a day. Basically, self-report the numbers versus relying on these forms which are beyond confounding to me.
  • Momma2018Momma2018 Registered User Posts: 408 Member
    I'm not sure. When was Spring semester due - maybe part of the payment was in 2019 and will show on next year's 1098? You are correct that the portion of scholarship for room and board is taxable.
  • WantWhatsBestWantWhatsBest Registered User Posts: 94 Junior Member
    It was due January 5.
  • patsmompatsmom Registered User Posts: 4,572 Senior Member
    https://www.irs.gov/pub/irs-pdf/p970.pdf

    Everything you need to know is in here. Not exactly light reading but it's all there. @-)
  • mommdcmommdc Registered User Posts: 10,864 Senior Member
    edited February 9
    The 1098T is provided by the school to facilitate the claiming of education tax credits.

    A school is actually not required to provide the form if scholarships exceed qualified education expenses (tuition and qualified fees) received.

    The 1098T can be used to figure out taxable scholarships, but you can also use your own records.

    If your son had a scholarship specifically for room and board and received that scholarship in 2018, then just report that on his tax return.

    Tax software will ask about education expenses and you can fill in the box 1 and box 5 of the 1098T, then where it asks how much of scholarship was used to pay for room and board, put the $1,750.

    It will make that amount taxable then.
    He won't owe taxes on it unless his other income plus taxable scholarships is over $12,000.
  • BelknapPointBelknapPoint Registered User Posts: 4,029 Senior Member
    You need to understand that the 1098-T issued by the college will not necessarily reflect what the actual tax situation is. There could be scholarships that would otherwise be non-taxable that the taxpayer chooses to make taxable for any number of reasons which the college is not aware of. You'll have to get all the figures and do your own accounting to determine how much, if any, of the scholarship money is taxable based on how you decided to allocate it.
  • WantWhatsBestWantWhatsBest Registered User Posts: 94 Junior Member
    Yes, thanks very much for all this info. I forwarded that pdf in the link above to our tax person. He is the one who asked me why I thought the R&B scholarship was taxable and whether I got a form from the school saying so. That got my head spinning. I've sent all this great info off to him. Now it's in his hands to hopefully report properly.
  • mommdcmommdc Registered User Posts: 10,864 Senior Member
    You can do your son's tax return for free most likely with TurboTax Freedom edition online.
  • mommdcmommdc Registered User Posts: 10,864 Senior Member
    Show the tax preparer the part on the Publication 970 that deals with tax-free scholarships. It should say there that scholarships or grants used for room and board are taxable.

    Based on the 1098T he might say only $1,100 is taxable. But you are not claiming an education tax credit so I would just report the whole room and board scholarship of $1,750 as taxable for your son.

    His tax liability won't be affected by it.
  • allyphoeallyphoe Registered User Posts: 2,029 Senior Member
    If that's your son's only income, he has no filing requirement.
  • WantWhatsBestWantWhatsBest Registered User Posts: 94 Junior Member
    @allyphoe -- he does have a bit of earned income and received a W2 for it. Very small amount of federal tax withheld -- so we're filing to get that back.

    @mommdc -- yep, it's the first thing I cited to him. Provided a link right on the IRS page showing scholarship used for R&B is taxable. Also sent him screen shot of the fall bill with the $1750 line item highlighted that says: scholarship/Room and board. I totally agree that this full amount should be reported. And we don't expect him to have any tax liability from it for 2018.

    I still can't figure out what accounts for the additional $1100 listed for scholarship/credits total versus payments on the 1098T. That's going to gnaw at me until I can hunt it down. His fees, out of state surcharge, and tuition were all essentially credited/waived. The balance was for R&B -- $1750 of which was credited from the scholarship. The balance was paid by us. There shouldn't be any additional anything showing up on the credits side of the ledger.
  • twoinanddonetwoinanddone Registered User Posts: 20,188 Senior Member
    Some of the fees might need to be included as taxable scholarship if they aren't QEE. insurance is one, transportation around campus (the buses or trolleys), some other things. It varies school by school because some schools itemize these fees while others lump them. That could be your $1100, especially if they have two semesters of non qualified fees on the same 1098.

    I kept everything separated by tax year. The school always had the billing for spring semester posted in Dec but never posted the grants and scholarships until Jan, so the 1098 wasn't correct. i used the billing and matched up all the scholarships and all the charges. It really was a lot easier for me to keep the tax years separate and just fill in the tax software manually. I think it asked if there was a 1098 and then it asks if the 1098 is correct and I answered NO! and then filled in my own numbers from the statement.

    My daughter had 5 or 6 charges: tuition, 2 fees, room (some years), board, and insurance. I added the tuition and 2 fees (plus added in her books and equipment) and that was the QEE. I then added up all her grants and scholarships (usually around 8 different items). Subtract and pay taxes on the difference. All in the same tax year.

    I'm sure your tax guy doesn't know because most people don't have this situation. Even here on CC it is not that common for students to have a full ride and therefore need to pay taxes on the non-QEE amount.
  • mommdcmommdc Registered User Posts: 10,864 Senior Member
    Was there a housing deposit paid? Some fees might be non qualified. You might never find out. But if you report more than the form suggests, then that shouldn't cause any problems. And you can prove it with the tuition statement.

    If he has only that scholarship and the W2 you could do his taxes on your own.
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