I found the place to do it - hidden in the W2 area is an option to add taxable scholarships. I removed the 1098T form and education info from her return entirely and left it on mine. That seems to have fixed the problem.
I would have thought H&R Block would have realized she can’t take the AOTC since I already indicated she’s a dependent on her parent return, but no (TT did). One more thing to watch for.
Now I just need to double check all the numbers to be sure I calculated this correctly. The 1098T only tells part of the story, there are outside scholarships, QEE not billed by the school and payments I made.
Last year I used TurboTax for my return (parent) and TaxAct for the student. Both asked me if the 1098T was correct, I said no, so then it asked for additional scholarships and additional QEE (books and supplies).
This year it lets you change the “tuition” amount (which I take to be tuition and fees) but not the scholarship amount. That was true for TT as well as H&R Block. You can add scholarships not on the 1098 on another screen (like outside ones) but you can’t correct it if the amount on it is more than actual scholarships
I’ve never used H&R Block online. Does it ask if student can be claimed on parent return? It should not let student claim credit in that case.
I’ve used TT and Taxact. We locked in price with Taxact from last year, but for D it wanted to charge us $40. She can file for free with Taxact freedom edition so I did her return with it.
The way it worked for us we had box 2 from 1098T qualified tuition and fees $18,000
box 5 was scholarships $21,000
It then asked the scholarship amount that paid for unqualified expenses, we put $4,000
D reported that amount as taxable scholarship income on her taxes.
Since $4,000 of scholarship paid for non QEE, then the rest of $17,000 ($21,000 total) paid for QEE.
Since billed tuition and fees was $18,000 we could claim the excess $1,000 for AOTC.
Oh and our 1098T was correct and also listed the outside scholarships as part of the total scholarships because they were paid to the school and applied to her account.
The only other QEE I added that wasn’t on the 1098T was books.
Nice! I had to go over her student statement and do a lot of math myself. Like her health insurance came in as a cost then out in the other column as it was waived, stuff like that. Her outside scholarships were sent directly to the school too but were not included in the 1098T for some reason.
@mommdc , I don’t think you’ve quite got the best result. If there was 21,000 in scholarships, and only $4,000 went for non-QEE, then $17,000 was for QEE, leaving (as you note) only $1,000 of your $18,000 total QEE that you can claim credit for. If your student takes $7,000 of taxable scholarship, leaving $14,000 of the scholarship going to QEE, that would leave $4,000 of QEE for you to claim credit on. Run the numbers both ways, for us, we make out better by shifting more to our son since the tax he pays is still less than the credit we get.
@sweetbeet, we can’t. Her merit scholarship is specifically a tuition scholarship, it covers tuition $ amount exactly and adjusts as tuition increases. So we get free tuition, get a small AOTC for fees and books we pay, and D pays a bit of tax on her other scholarships that help pay room and board. I’m happy with that.