Hello, I’m helping with my daughter’s tax return and am struggling! Her 1098-T shows the payment amount in box 1 and the scholarship amounts in box 5.
Box 2 is blank.
Using a software, when I put the amount in box 1, it does not give me the credit but if I put the amount in box 2 it gives me the credit.
WHY???
That means 1098-T and my reporting does not match… I would love to just go ahead and put the amount in box 2 and file it, but that’s not what her 1098-T says.
Will someone please help me? My daughter is currently in Japan (JET program) and I did file the extension.
Thank you in advance!
If the school had put a figure in box 2, what would it have been? Figure out what that number is, and use it when your tax software asks for a 1098-T box 2 amount. Remember, the box 2 amount, plus other qualified education expenses (QEE) (like textbooks) must be reduced by the box 5 amount, plus other tax-free educational assistance, to come up with the adjusted QEE that is used to figure the AOTC.
Thank you BelknapPoint. For last 3 years I have claimed my daughter as a dependent and claimed AOTC, and had no trouble getting the credit… I will try what you suggested.
Much appreciated!
What software?
It’s H&R Block Free File Fed/State…
I had a different issue that would not parse correctly in tax software and I could not resolve it. I had to move to a different free software which allowed for what I needed to do.
I take it that in tax year 2015 your D was no longer your dependent?
I am not able to copy the passage on my tablet, but look at Pub 970, p. 20, upper left. It basically says you can use amounts other than what’s on the 1098-T, if appropriate. However it’s a little weird when the software wants you to enter the figures exactly as shown.
I don’t know why the software reacts differently depending on which field you use.
Perhaps other software or using irs online fillable forms will work better for you.
Alooknac, thank you for your advice! I claimed her as my dependent till last year but not this year. Had no problem getting AOTC credit last 3 years. This is all new to me…I’ll see what works for me the best… Thank you!
How much is her earned income, taxable income, income tax?
Her total income was $7938, adjusted gross income was $5938… I tried out 3 “free filing” software. 2 out of 3 gave me the same Fed refund amount. 1 gave me 1k more Fed refund than the other 2. I consulted with my tax person, and her software (she used H&R Block software) didn’t pick up the AOTC credit at all when she input the number as reported on 1098-T (Box1 Payment received: $3501.53 / Box2 Amounts billed: $0). When she input the number in line 2, then the software picks up the credit.
Did you try Turbotax freedom edition (efile Fed and possibly state is free if AGI under $30k I believe)?
Does box 1 amount paid on 1098T reflect what your adjusted qualified education expenses were? When you add up tuition, fees, books and subtract any scholarships and grants, what number do you get?
Yes, the box 1 amount was the amount I put for the adjusted qualified education expenses.$3501.53.
Scholarship was$1117.69, so if I subtract that, the amount would be $2383.84.
Please forgive me if I’m not answering your question correctly…I’m such a novice at this tax thing 
I think you should either “blank” the box 2 or enter $3502 on the box 2. If you entered $0 on the box 2, you maybe telling the software that you have no “possible” qualified educational expenses; thus, you had no qualified educational expenses. If both box 1 and box 2 have entries, the software may not smart enough to pick out which is the qualified educational expenses,
I talked to the tax department of the school and I was told that Box 1 and 2 both can not have the amount. If the Box 1 has the amount, then the Box 2 should be left blank. And that’s what my 1098-T shows.
I can input the amount in line 2 so the software picks up the credit and I get like $1K more in refund.
But if it was incorrectly filed and IRS finds out about it, I have to give $1K back…
Maybe it’s a software issue…?
Qualified education expenses for AOTC are tuition, qualified fees, books. So if school billed $3502 and $1118 was covered by scholarship, the remaining $2384 are adjusted QEE and you can add the cost of books to that number.
Thank you mommdc and 4kidsdad!
Regardless of the boxes, it sounds like she has zero income tax before credits so the non refundable part of the crefit is zero. She can only get the refundable part if she provided over 1/2 of her own support through earned income.
How much did it cost to educate, feed, clothe, house, entertain and insure her for 2015?
How old is she, what year in school, why is she no longer your dependent, how many calendar years before 2015 has the AOTC been claimed?
Was she a senior in spring 2015? If so, the reason box 2 is blank is probably because the tuition was billed in Dec 2014. If you did not use that tuition on the 2014 taxes, and box 7 is checked, then you can add up that tuition for spring 2015 and use it. The software will ask if you have costs that weren’t included on the 1098T and you can add them. You have to figure out if Box 1 is included elsewhere.