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Form 1098-T

hanner1hanner1 3 replies1 threads New Member
My DS received this tax form 1098-T from his college. From reading other threads, I understand this is used primarily for getting education tax credits. However, on the flip side, if your child is getting a scholarship and Box 5 on the form is more than Box 1, then your child owes taxes on the difference from my understanding. For my DS, the difference is a little more than $3,000. However, my DS will not be filing taxes because he didn't make anywhere near the $12,200/year (the minimum required to file taxes) with his summer job, even including the $3K from form 1098-T. So does this mean, I have to include the $3K in my income, although the form has his info?
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Replies to: Form 1098-T

  • twoinanddonetwoinanddone 23865 replies17 threads Senior Member
    No, it is your son's income to file.

    If he doesn't think he needs to file, that's his decision.

    Sometimes it is easier to file, even if you (he) owes no taxes or is getting no refund (no withholding from summer job?) because then he can use the DRT on the FAFSA next year. It's a little easier than getting a tax transcript or statement of non-filing.
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  • thumper1thumper1 76595 replies3392 threads Senior Member
    edited February 11


    $12,000 is the standard deduction which means this kid probably won’t have to pay taxes.

    No you don’t include your son’s income on your taxes.
    edited February 11
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  • hanner1hanner1 3 replies1 threads New Member
    Wow! I never thought of that. I don't think there was any withholding from his summer job but it still makes sense to file to at least use the DRT. Thank you for your advice. I'll check if he wants to file.

    Another question regarding the $3K. I feel like there may be an error because the description for Box 1 on the form itself says: "total payments... for qualified tuition and related expenses."

    Wouldn't Room and Board, activities' fees and school health insurance fall in the "related expenses" category? In which case, the amount in Box 1 should be more and the difference would be less. Is it worth asking the school to correct if indeed that's the case? TIA
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  • thumper1thumper1 76595 replies3392 threads Senior Member
    edited February 11
    Qualified expenses are tuition, fees and books. Not room and board.

    If your son had any withholding from his summer job, he wants to file so he can get that money back.

    @BelknapPoint you are so good at explaining this!
    edited February 11
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  • hanner1hanner1 3 replies1 threads New Member
    Thank you, I will have him gather up receipts for his book purchases. But, what are included in fees?
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  • thumper1thumper1 76595 replies3392 threads Senior Member
    Look at his account from the bursar at his school. Fees can be for lots of things...but they should clearly be listed in his bursars account.

    This varies by college.
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  • BelknapPointBelknapPoint 4785 replies18 threads Senior Member
    ...if your child is getting a scholarship and Box 5 on the form is more than Box 1, then your child owes taxes on the difference from my understanding. For my DS, the difference is a little more than $3,000.

    The fact that the 1098-T box 5 amount is more than the 1098-T box 1 amount does not necessarily mean that there is a taxable scholarship amount.

    Payments from all sources for all expenses need to be identified and allocated before a determination can be made as to whether or not there is taxable scholarship money.

    Also, it's not at all unusual for errors to be made when the school prepares 1098-T forms.
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  • hanner1hanner1 3 replies1 threads New Member
    Thank you all for your replies.
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  • mommdcmommdc 11786 replies31 threads Senior Member
    The 1098T form reports what has been received in payments for qualified tuition and fees in 2019 (box 1 in his case $0).

    And the scholarships and grants that were received in 2019 (box 5).

    Sometimes spring scholarships post to the account in the next year, while payments for fall and spring post in the previous year.

    As long as his scholarships and grants paid for qualified tuition, fees, and books, they are not taxable.

    It might be useful to look at the 1098T for 2018 and tuition statements.
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  • twoinanddonetwoinanddone 23865 replies17 threads Senior Member
    Not all fees are 'Qualified'. Some schools break out their fees and if they do, some will not be QEE, like transportation (a bus around campus), insurance, some sports fees. We were lucky here as d's just charged 2 'student fees' without breaking them out.

    I used the bursar's statement to match up all scholarships and what each paid for to decide whether there were taxes owed. My daughter's meal plan was paid for by her athletic award (so taxable). Her school was very good at applying scholarships to tuition first (if allowed) and leaving non-qualified expenses to be paid for with loan money or OOP.

    Keep your records year to year. You will have college costs in 5 tax years but can only take AOTC for 4 tax years (if eligible).
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  • BelknapPointBelknapPoint 4785 replies18 threads Senior Member
    Keep your records year to year. You will have college costs in 5 tax years but can only take AOTC for 4 tax years (if eligible).

    Which leaves the fifth year available to be used for claiming a different education tax credit -- the Lifetime Learning Credit. It's not as generous as the AOTC and like the AOTC there are restrictions, but knowing about it and being prepared in advance through strategic financial planning can pay nice dividends.
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  • one+twoone+two 153 replies7 threads Junior Member
    mommdc wrote: »
    Sometimes spring scholarships post to the account in the next year, while payments for fall and spring post in the previous year..

    What does one do in this case? Two of my 3 kids' schools include payments made in 2019 for Spring 2020 as well as scholarships for Spring 2020 on the 2019 1098T.

    The other one the school has all the payments we made in 2019 including the ones in December for Spring 2020 but not the scholarships for Spring 2020. For this year it doesn't really matter as he is the only one that even if they were included they still wouldn't equal the QEE or even keep us from getting the AOTC. He's a freshman, though, so I'm wondering about that last year when he would have scholarships for Spring 2023 on the 2023 1098T but the payments would be made in December 2022 so on the 2022 1098T

    And its not like it's easy to wait. The deadline for payments is Jan. 2, the school is closed on Jan. 1 and they post a late payment fee starting on Jan. 3. Makes even doing an electronic transfer in the new year tricky.
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  • mommdcmommdc 11786 replies31 threads Senior Member
    edited February 16
    I was contemplating paying the $40 late fee in S's last year of college, if I make the payment in January 2022 instead of in December 2021.

    That way the spring 2022 payment should be listed on the 2022 1098T.

    At my D's school the due date for spring semester is January 20th, so it's no problem there.
    edited February 16
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