1098-T PS Pro is deducting box 5 from box 1

[Terry53029]

program should not be deducting box 5 from box 1 in 2018. I have had two 1098-Ts, and one was done correctly, and one was done wrong from university. (I have the statements from university) You don't have to override to correct this. When filling out the 1098-T scroll down to reconciliation of  box 1 line B, and put in amount in box 5. Then go to student info worksheet part V, line 3, and then enter amounts actually paid. You should get the correct credit without having to override. This year is going to be difficult to do education credits right

[TaxGuyBill · Accepted solution]

Huh?

For calculation of the educational credits, the credit is based on the amount of tuition that was NOT paid by scholarships.  So unless the scholarships are applied to non-tuition (which is often what you want to do), you (or in this case, the program) need to subtract Box 5 from Box 1 to determine that amount of tuition that is eligible.

As was pointed out in the other thread, Box 1 should include all tuition (including the tuition that was paid by scholarships).

[rbynaker]

Other thread, for future reference:

https://accountants-community.intuit.com/questions/1800325

[rbynaker]

Bill, I think the problem is when the 1098-T does NOT properly include tuition paid by the scholarship.  Then it's garbage in, garbage out.  I've given up trying to get 1098-T forms corrected, I just document the heck out of who paid what, when and how.

IMO, not a ProSeries bug, a university reporting bug.

Rick

[Terry53029]

Bill I agree, I just was trying to show that when a 1098-T is incorrect you don't have to override

[TaxGuyBill]

Gotcha.

However, if the university does not correct the 1098-T, I suspect that will dramatically increase the probability of an IRS notice.

[rbynaker]

Thanks Terry, that may help folks work around the problem.

[Terry53029]

I always try and get the invoices from client, and over the years I have many incorrect 1098-Ts, and I've always used the method above to fix. Have not heard from IRS when I corrected them. I do tell client to try and get a corrected one,

[poolcleaner]

One of the nastiest audits I've seen was caused by using the correct numbers instead of those on the 1098-T.  That issue was solved easily but it continued on to a very complex Sch C which took months with essentially a no change audit and the loss of many months of time.