Your Life

Your Life

Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.

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Valued Pioneer
Posts: 4
Registered: ‎03-28-2017
Accepted Solution

Question about 1098-T, Claiming Dependent, Education Credits

My daughter received a 1098-T.  Box 2 is $19,450. Box 5 is $9,750. I don't believe this is taxable so she shouldn't have to claim it on her taxes, correct? Also, we are/were claiming her on our taxes as a dependent. On her return it states that if someone else claims her as a dependent, she can not claim the Education credits. Do we claim the American Opportunity, Lifetime Learning Credit or the Tuition Deduction?

 

Thank you for your help!

 

D2Milligan

Associate (Neighbor)
Posts: 220
Registered: ‎07-22-2014

Re: Question about 1098-T, Claiming Dependent, Education Credits

Hello, D2Milligan, and welcome to the community.

 

You are correct - the scholarships in box 5 of the 1098-T are not taxable, as long as they were used for tuition and mandatory college fees.

 

Since you are claiming her as a dependent, you should claim the education credit for her schooling on your return.  If she is an undergraduate, my guess is it will be most beneficial to take the American Opportunity Credit.  As long as you haven't claimed the AOC four times for her, that would be where I would go first - if you have, then the Lifetime Learning Credit is usually the next-best option.

 

Hope that helps!

 

-kurt

Valued Pioneer
Posts: 4
Registered: ‎03-28-2017

Re: Question about 1098-T, Claiming Dependent, Education Credits

KurtH,

Yes, that is very helpful. Thank you so much for your prompt reply!

 

~D2Milligan

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Council Member
Posts: 548
Registered: ‎04-06-2016

Re: Question about 1098-T, Claiming Dependent, Education Credits

D2Milligan,
There are cases where claiming part of your daughter's scholarship as income might be beneficial. Also, you need to be careful when reporting the amount of tuition and fees paid in 2017 because it will not necessarily be the same as the amount billed shown in box 2 of your daughter's 1098-T.


I've written some long, detailed responses describing this in other threads. If you search for AOC, or American Opportunity Credit, or 1098-T you're likely to find them.

Karen