1098-T, Box 4 -

[360 Tax Martin]

My client received a 1098-T for 2019 with only box 4 filled in. When entering this into the 2019 1040-X inputs for tuition under recapture > 'Tax-free education assistance or refunds received after filing 2018 return', the amount on line 7 of the 1040-X increases, but no form 8863 is produced. What am I missing here?

[Terry53029]

You shouldn't use 1040x to amend if the refund was for tax year 2019 then you put the difference as additional tax on the 2020 return. From pub 970:

"Credit recapture. If any tax-free educational assistance for the qualified education expenses paid in 2020, or any refund of your qualified education expenses paid in 2020,
is received after you file your 2020 income tax return, you
must recapture (repay) any excess credit. You do this by
refiguring the amount of your adjusted qualified education
expenses for 2020 by reducing the expenses by the
amount of the refund or tax-free educational assistance.
You then refigure your education credit(s) for 2020 and
figure the amount by which your 2020 tax liability would
have increased if you claimed the refigured credit(s). Include that amount as an additional tax for the year the refund or tax-free assistance was received.
Example. You paid $7,000 tuition and fees in August
2020, and your child began college in September 2020.
You filed your 2020 tax return on February 17, 2021, and
claimed an American opportunity credit of $2,500. After
you filed your return, you received a refund of $4,000. You
must refigure your 2020 American opportunity credit using
$3,000 of qualified education expenses instead of $7,000.
The refigured credit is $2,250. The increase to your tax liability is $250. Include the difference of $250 as additional
tax on your 2021 tax return. See the instructions for your
2021 income tax return to determine where to include this
tax.