1098-T

[LizPS]

I have a 22-yr old taxpayer.  She's a full-time student and lives in the state where her college is.  She has $1000 of earned income.  Her parents will claim her as a dependent but she pays for college with scholarships.  Her 1098-T reflects $11,000 in tuition and $13,000 in scholarships.  At worst I think $2000 might be taxable but why is Proseries Basic reporting the full $13000 at taxable?

What am I missing?

[HOGANTAXES]

I have seen this happens! It adds it as wages. I believe it has something to do with the scholarships exceeding the tuition. Do you have the student linked to the 1098T and code S as dependent code?  Its correct. i can't recall the publication... I do remember reading it about 6-8 years ago!

Sorry I'm not much help, but I have seen it!

Andrea Hogan-Carter

Hogan Tax Services

[LizPS]

Andrea, I do indicate that Taxpayer is the student and it's her 1098-T but what do you mean by S code for dependent?

[IRonMaN]

Sounds like the 1098T worksheet wasn't completed properly.  Go back and look at the tuition and scholarship boxes.

[HOGANTAXES]

Disregard the code S. Sorry, i read your original post wrong.. If she is going to be claimed as a student on a parents return, the 1098T will go on the person return who is claiming the student. Hope you have figured out a solution. Have you tried calling for Tax help? irs.gov is always helpful!

Andrea

[flor2399]

You need to mark yes in the 3  boxes in the information worksheet that asks if she will be claimed by anyone else (parents)? The scholarship/grant will then be non-taxable income to her. 

[HOPE2]

Since scholarship amount more than tuition so you should not report 1098-T on his parent tax return. If student has some other expenses can add up his tuition exceed his scholarship is fine report his 1098-T parents return otherwise not. If student has a w-2 you can file for student separately ( mark as dependent)provided that take a refund or due. Just take 1098-T for parent when tuition less than scholarship.

[taxiowa]

All the scholarship will be taxable until you check the student is going for a decree box towards the top of the taxpayer student worksheet.  Not going for decree; fully taxable.

[HOPE2]

@taxiowa Not when it is less than tuition.

[sjrcpa]

In OPs facts, the scholarship is more than the tuition.

[Camp1040]

Is there anyway to undo a thumbs up?