The client received a 1098T form with blank in Box 1 and $3750 in Box 5. The client didn't pay anything when enrolling in classes (Tuition). I think this is the case because Tuition is free for the first two years at a community college in California. The client only had some book expenses of $400 dollars. Here is the question, because there isn't enough expenses related to school (Tuition, Material, etc.) to offset Box 5, would the amount of $3,350 ($3,750 - $400) become taxable for the client?
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Yes, scholarships that were paid in excess of the qualifying tuition and fee are taxable to the student.
But you generally shouldn't rely solely on the 1098-T, as they are very often wrong. So you may want to get an itemized printout with the details from the college.
Yes, scholarships that were paid in excess of the qualifying tuition and fee are taxable to the student.
But you generally shouldn't rely solely on the 1098-T, as they are very often wrong. So you may want to get an itemized printout with the details from the college.
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