Prepaid Tuition/Taxable Scholarships/AOTC question

BelknapPoint
Thu, 31 Jan 2019 02:50:03 +0000

Does 1099-Q go on his taxes if in his name and the 1098-T reported on ours? Just very confused.

The 1099-Q and 1098-T don’t “go on” anyone’s tax return. Information from a 1099-Q can be used in figuring the taxable portion of any non-qualified distribution, and the tax return this income would be reported on depends on to whom the distribution was made payable. Information from a 1098-T can be used to help figure out if any scholarship money is taxable, and this would be reported on the student’s tax return. It can also be used to claim an education tax credit, and whether this is reported on the student’s return or a parent’s return depends on a number of different factors.

If your son had $4,768 in AOTC qualified expenses in 2018, but $3,584 was paid from a “prepaid contract” and the balance was possibly paid through a tax-free scholarship, there’s no way you will get “almost the full AOTC.”

But, there are lots of details that you have left out, so it’s impossible to say whether or not the tax programs are correct.