<p>Here is the situation:</p>
<p>I am not receiving a 1098T because the grant/scholarships exceeded tuition. Included in the 1098T was a reimbursement for a trip thru a non profit organization. This amount raised the total grant/scholarship monies to a figure higher than the tuition charges even though the money went towards a plane ticket and accomodations. </p>
<p>The grant/scholarship money I received for tuition is slightly under the actual tuition costs. Since my child stays on campus, I have room and board charges which are paid with a combination of 529 funds and out of pocket money. Can I put the 529 money toward tuition and use the grant/scholarship money towards room and board which will allow me to take the AOC? Will this be a problem since I am not receiving a 1098T? </p>
<p>Note: My child did not make enough money to file taxes in 2013. I am able to do what I stated above his earned income will still be below the $6100 filing tax requirement.</p>
<p>You can’t use expenses paid for with non-taxable 529 distributions to claim the AOC. You can’t get a double tax benefit for the same expenses. Your D would have to include the earnings portion of the distribution that you put toward QEE as taxable income. She still may not have to file depending on the numbers. You don’t need a 1098T, just have darn good documentation of the amounts involved from bills/online account printout, cancelled checks and other records of payment and receipts. The terms of the scholarships/grants also can’t require that they be used for tuition/fees etc. Remember to include required book and supply purchases to offset part of the scholarship/grant amounts. Rather than apply the 529 distribution to tuition/fees, you may be able to apply some of the scholarship/grant amounts to R&B to the extent you had out of pocket, have her declare more of the scholarships/grants as taxable, and you take the AOC on those expenses. She still may not have to file. It can get complicated but if you are confident in your knowledge or can consult a tax expert there is shifting that can be done.</p>
<p>IRS Pub 970 has the info. Chapters 1, 2 and 8 would apply to your questions. Be sure to look at the examples provided as well as the text.</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>Here are the figures:</p>
<p>Grants totaled $45,299. Cost of tuition and activity fee $44,385.50. The difference is $913.50. I would claim $4913.50 of the scholarship money and the 529 funds of $4000 went toward the room and board cost of >$12,000. No 529 funds would be used to claim the AOC. Since my child did not earn any money this year the $4913.50 would be the total earned income which is below the $6100 cut off for filing taxes. This would allow me to claim the max AOC. </p>
<p>Can I do this?</p>
<p>I understand now. Thanks for the link.</p>
<p>Remember to add required book and supply expenses to the tuition/fees. </p>