I’m doing taxes, using TurboTax. I entered the 1098T info as well as other info I have on expenses, scholarships, etc for college. That went fine. I did apply some of D’s scholarship to R&B in order to claim the full AOTC (actually TT basically did this for me, which was impressive, I thought).
Now on D’s return, I need to have her claim that taxable scholarship income but it’s not quite so straightforward. D’s return asks for all the same info mine did - the 1098T, the books, everything. I feel like I’m filling everything in twice and at the end it says she doesn’t qualify for AOTC (of course). But it’s not adding any of the scholarship amount to her income, either.
Should she not be filling out any of the college/1098T section and simply add the scholarship amount to her income? If so, where?
I’m claiming my child as a dependent, so I think the 1098 is reportable on MY tax returns - not my child’s - but your post has me questioning that! The instructions on the form suggest that I am correct to be claiming it on mine. OP can you explain why your daughter would be filing separately?
My D has work income and gets a refund, so she always files. She’s still my dependent. This year I’m putting some of her scholarship on her return as taxable income to maximize the AOTC - as per: https://www.irs.gov/pub/irs-utl/Pell%20AOTC%204%20pager.pdf
In googling around it seems fine to put the 1098T info on both, I guess I’m just wondering if I need to put her books, etc on both or just on mine.
…and where the taxable scholarship info should go on hers. what type of income is it?
If I remember correctly I went and entered education expenses on both our returns, on the parent return entering info from 1098T and book expenses resulted in us claiming AOTC.
On the student return it also walked us through the education expenses interview, but it said she does not qualify for AOTC and entered her taxable scholarships on the 1040 form.
Do you see a question asking if any of the scholarships paid for room and board?
@janjmom, yes the AOTC will be claimed on your return if child is your dependent.
But if child has taxable scholarship income (scholarships that paid for anything else other than tuition, fees, books, for example room and board) then child has to report it on their own tax return.
We did see that question, and it briefly showed a tax due, then it magically disappeared and went back to giving her a refund. We may need to just enter it all again.
When I entered it all on my return, it told me she’d have taxable income of $x…we didn’t get that message on her return.
When I did my son’s on TurboTax, it asked the right questions and put in the extra taxable amount as taxable income.
Interestingly, it did a 1040 for him this year, but a 1040A last year.
Does anyone know whether the extra taxable scholarships, or the kiddie tax form, kick it up to the long form?
"If you cannot use Form 1040EZ, you may be able to use Form 1040A if:
Your income is only from wages, salaries, tips, interest, ordinary dividends, capital gain distributions, taxable scholarships and fellowship grants, pensions, annuities, IRAs, unemployment compensation, Alaska Permanent Fund dividends, and taxable social security or railroad retirement benefits
Your only adjustments to income are the IRA deduction, the student loan interest deduction, the educator expenses deduction, and the tuition and fees deduction
You do not itemize deductions
Your taxable income is less than $100,000
The only credits you are claiming are the credit for child and dependent care expenses, the credit for the elderly or the disabled, education credits, the retirement savings contributions credit, the child tax credit, the additional child tax credit, the earned income credit, and/or the premium tax credit, and
You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option."
I think he qualifies. I’ll have to look a little closer.
@OhMom2, did your D only have taxable scholarship income on her tax return? Under the standard deduction amount of $6300? Then she might just not owe tax.
OK In the end, Turbotax got it right; it spit out a 1040A for DS. In our case, he ended up paying about $600 more, so we could get the $2500 credit. (His earned income was right at the standard deduction level, and he got some taxable scholarships, but we shifted $4000 more into the taxable category so we could claim the AOTC.)
I had the same problem. TurboTax worked great on my return but I could not get the program to properly adjust the scholarship amounts for my daughter. Maybe, I am just dumb.
However, this is how I got it to work. Open the forms section of TurboTax. Go to the student Information worksheet. Look at Part V (on page 2). Use line 4 to indicate the amount of scholarship that was used for the AOTC and for non AOTC QEE (scholarships-tuition/fee/books+amount declared taxable for claiming AOTC). If all goes well, you should see the taxable scholarship show up on the wage line to the left of the data field with the code SCH before it. Make sure to look at the whole worksheet and verify all data is correct.
Many consumer tax software are making the “education credits / deduction and taxable scholarships” way too complicated.
However, the least user friendly Taxwise makes it very easy.
It would not asking you for 1098T information. If you think that you’ve taxable scholarships, you just enter into the worksheet and the taxable scholarships will show up on line 7 of your 1040. If you think that you’ll qualify for AOTC, you just enter the AQEE (up to $4000) into 8863, and AOTC sill show up on line 50 & 68 of your 1040.
Jeez. Now when I enter the 1098T on both our returns, it gives us BOTH the credit. I know that’s wrong, should I just take the info off of hers and put the taxable income amount?
Might be easier to do it by hand. The taxable amount of the scholarship is included in total income on line 7 (1040A). To the left of the total income amount on line 7 you list the taxable amount of the scholarship with the letters “SCH”. You also need to fill out form 8615 since taxable scholarships are consider unearned income for the purposes of form 8615. This form determines what amount of the unearned income is taxed at the parent’s rate. I am assuming that you are declaring the student on your return.
When I tried H&R Block (PC version) last year it directly asked for the taxable amount of scholarship. I like TT better but it also gave me issues with my student’s return but could have been the operator.
