I had that thought as well but Texas Guarenteed Tuition Plan -TGTP money is not allowed to pay for room and board .
^^^
I guess that’s why they call it a “Guaranteed Tuition Plan.”
Yes, then it sounds like you can just claim the books for AOTC. Better than nothing.
But the Florida Prepaid is really just a 529 plan, and if you don’t use it for tuition at a Florida public, it can be paid to you or any other school just like a 529 plan. Yes, IF the FPP sends the money to the school, it is in the amount of tuition and will be applied that way first.
If you feel it must be applied to tuition only, then the scholarship and grant money will become taxable unearned income to the son and there will be no AOTC money (maybe the books).
My D gets a tuition scholarship. In the past few years we were able to get AOTC of around $1,000 for books and qualified fees.
That still more than offset her kiddie tax (she claimed her state grant as taxable). I will take it.
So your AOTC was claimed for books and qualifies fees not paid for by the tuition scholarship. And her state grant was taxable because it went toward unqualified fees like room and board?
Yes. Tuition scholarship was exact amount of tuition (it adjusts yearly), and was tax-free.
Remaining fees, and books we paid out of pocket, and the state grant (PHEAA) was used towards room and board (allowed to be used for living expenses), and therefore taxable.
But if the scholarship used for tuition was already tax benefited funds (a 529 distribution), it cannot also be used for AOTC. Because the TGTP was already tax benefited money, you can’t declare it taxable and claim the AOTC.
What if the schoalship and Pell grant was used for room and board and then counted as taxable income on sons taxes … would I then be able to claim the AOTC ? My son is my dependent.
Yes, your son already has to declare the scholarship and Pell grant as taxable, because it pays for room and board.
Since TGTP has to pay for tuition, you cannot allocate any other money towards tuition.
So in your case, you can either reduce son’s taxable scholarship and grant by the $500 book expenses, or have him report the total taxable scholarship and grant, and then you claim $500 book expenses for AOTC.
We have no 529. My D had a tuition scholarship from her school, which she did not have to declare taxable because it paid for tuition. That’s what I meant by it being tax-free.
We only claimed AOTC on the books and qualified fees.
And her grant was taxable because it paid for room and board.
A question, did your son get full Pell, or was it $5,637 which was listed on the 1098T in box 5?
Did he get a refund from the school?
You said that the TGTP paid first, directly to the school, for all tuition and fees.
So then the Pell grant would have paid the rest of billed costs, room and board.
If the Pell was more than remaining billed costs, there would have been a refund.
No refund for 2017 but a refund was issued for 2018. How do we treat the refund?
Yes for 2017 Pell and scholarship amt listed in box 5 of 1098-T. That amount covered room and board and left a bill balance of 36.63 which we paid … No refund for 2017
Looks like some of your son’s aid was credited in the beginning of 2018.
That would come into play for next year I would think.
I know I only reported the grant my D actually received in 2017 on her 2017 tax return.
I will need to remember to add the grant she got for spring 2018 to her 2018 taxable grant income on her 2018 tax return.
For you, you should add up all scholarship and grant received in 2017 and subtract from that the adjusted qualified education expenses AQEE, which is the tuition, qualified fees, books, minus the TGTP payment.
That is what your son reports as taxable scholarship and grant income.
Or you add up all scholarship and grant aid that paid for room and board, and declare that taxable on his return, and then you claim $500 book expenses for AOTC.
The refund was based on 2018 bill . He just received it for spring 2018 bill. I’m just planning ahead on how tot report it
The refund is part of his 2018 aid. He received it because the billed costs were less than the aid credited to his account.
You will just figure out all aid received in 2018 next year and how much in qualified education expenses he had.
It goes by what was paid and received in the tax year, not the school year.
That is probably why the 1098T doesn’t line up, because it only reported billed tuition and fee expenses and scholarships and grants from the year 2017.
Ok I think understand . You have been so helpful ! Now I’m going to move on to my other son. He did not receive a 1098-T . His school does not send them out when a student receives a full ride scholarship and his entire bill is paid for…
Because He has a full ride he received a refund check for spring 2017 and fall 2017 . His refund was 6136.43 and he used around 800 for books for both spring and fall 2017 . So from what I have learned I know he will need to file the refund minus books as income … but what about the portion of his full ride that was paid for room and board.?
FYI his full ride scholarship is broken down for the entire 2017 as follows a scholarship 22000 , presidents scholarship 3000 and Pell Grant 1200. I have no idea how to figure what money paid for tuition and fees and what money paid for room and board.
If they don’t specify what the scholarship can be used for, I would just add all of the scholarships and grants for 2017 together, and then subtract his tuition, qualified fees and book expenses from that.
That will be his taxable scholarship income.
I assume he had no TGTP payment?
You cannot just use the refund he got as the taxable income. He received a refund because his aid exceeded all of his education expenses the school billed for. Some of those were for room and board, which makes them taxable.
But if you add all scholarships and grants together, and then subtract the QEE (tuition, fees, books), then you will get the number he reports as taxable income.
Ok I understand but how in the world do I know what fees are QEE …here are some examples of his fees listed are : global business skills charge, COB technical service and Inst supp, automated service charge, digital learning fee, medical service fee, athletics fee, library resource charge… etc etc … these are some of the fees taken word for word from his bill. How would I know what Are QEE I don’t think pub 970 defines them?