1098-T Entry w/ Scholarship To Ensure Education Credits Captured

troy

Taxpayer is student, disabled, and received 1098-T.

Shows $43k scholarships and $28k tuition.

That creates $15,000 of taxable income.

Claimed as dependent on parent return.

I cannot find how to make this taxpayer eligible for education credits, so that the $15k is not taxable.

The $15k was used for other expenses (room and board, fees, books, supplies).

IntuitDavidD66

The student CAN claim an education tax credit, but only if the parent(s) do NOT claim the student on their return. If the parent claims the student as a dependent, the credit can only be claimed on the parent's return. To claim the credit on the student's return:

Indicate in the Information Worksheet that the student/taxpayer CAN be claimed as a dependent
When entering the Form 1098-T, under the Student Information, indicate that the student is the taxpayer.

There is no deduction or credit available for room and board, books, and supplies (unless paid as a requirement of enrollment).

TaxGuyBill

@troy wrote:

Claimed as dependent on parent return.

If the student is claimed on the parents' return, the student does NOT qualify for any education credits.

If the parents' income qualifies, they MIGHT be able to claim the credit, if ADDITIONAL scholarships are made taxable on the students return (if they are allowed to be used for non-tuition).

troy

I just find it odd that the $15k is coming through as taxable and there is no opportunity to offset it. It was used for education-related expenses (fees, room and board).

TaxGuyBill

@troy wrote:

I just find it odd that the $15k is coming through as taxable and there is no opportunity to offset it. It was used for education-related expenses (fees, room and board).

Room and Board are not qualified expenses for tax-free scholarships.

https://www.irs.gov/publications/p970#en_US_2025_publink1000177994