Under “Parent Financial Information”, it asks whether we got the American Opportunity Tax Credit (we did), child support, etc. One of the options is “Grant and scholarship aid reported to the IRS
Student grant and scholarship aid reported to the IRS in your parents’ adjusted gross income. Includes AmeriCorps benefits (awards, living allowances, and interest accrual payments), as well as grant and scholarship portions of fellowships and assistantships”.
Well we did enter the scholarship/grant amount from my daughter’s 1098-T on our tax forms. Does that mean I should enter that amount here on the FAFSA, or will there be a place to do so once I get to the student section?
So confused!!!
This is question 93d? That question is asking whether you, the parents, reported any of your taxable scholarships/grants to the IRS on your return. If the parents aren’t also students, you would enter 0.
None of her scholarship/grant info should be on your return. You may have used a software program that asked for that info so you could claim an education credit, but her taxable scholarships/grants should not appear on your return.
If your daughter actually had taxable scholarships/grants they would be on her return if she filed one and yes, there’s a question about that in the student section. If she had taxable scholarships/grants but not enough to have to file a return and she didn’t file one, then you don’t put in an amount for that question in the student section.
@annoyingdad - thank you for your reply. You’ve been very helpful before!
Hmm, Okay I even more confused!
So, two separate things now. One is the federal tax return. Yes, we use Turbotax, and it specifically asks for the amounts on the 1098-T for the section about education credits. So we filled in the amounts from line 2 on the 1098-T from her college (amounts billed for qualified tuition and required expenses) and line 5 (scholarships or grants). This qualified us for the $1500 American opportunity tax credit. Did I do that incorrectly???
And back to the original question, which is about filling out the FAFSA. The online interface doesn’t have line numbers, so I don’t know if it’s 93d. I tried to describe it above using the exact language. I looked ahead to the student income section, and the same question is there. Where do I enter the amount from line 6 of the 1098-T (scholarships and grants)?
There is a scholarship question in the parents’ section, asking if the parents received any scholarships and grants (if either or both of the parents were/are students), and there is a similar question in the student’s section, asking if the student received any scholarships and grants. If the 1098-T is for your daughter, that information would be used to answer the question in the student section. Does this clear things up for you?
Okay, sort of…
I guess I am confused about how to deal with the scholarship/grant amount on the 1098-T.
We (parents) pay the tuition, so we entered both amounts (tuition and scholarships) that are reported on the 1098-T when we went through the Turbotax interface. That was in the deductions section, where they are evaluating whether we get the education tax credit or not. I did not enter it anywhere else, like in the income section.
On the student’s tax return, I assumed she would not enter anything because we already had on ours.
Is the scholarship/grant amount supposed to be entered somewhere else as income?
… and then the followup to that is where to enter that amount on the FAFSA: parent section or student? It specifically says, "Student grant and scholarship aid reported to the IRS in your adjusted gross income. "
Box 6 is Adjustments to Scholarships and Grants from a prior year. Is there really an entry there?
Do you understand when scholarships and grants are taxable? Only when they exceed qualified education expenses. QEE is tuition, fees and required books and supplies. Is box 5 more than box 2? You don’t enter anything from box 5 into fafsa unless the amount in box 5 is more than box 2 and the difference was reported as income on the student’s tax return and thus included in her AGI.
Sounds like you did the AOTC part correctly in TurboTax but was the difference in the boxes only enough to get a $1500 credit? The max credit is $2500 based on $4000 of expenses. Did you include the cost of books and supplies as QEE for the credit?
Post the amounts that are in boxes 2 and 5 and is box 7 checked? If box 5 is larger than box 2 then TurboTax shouldn’t have given you the AOTC unless you did some ‘shifting’ of the scholarships/grants to have paid for non-QEE.
All grants and scholarships are student grants and scholarships. The ‘student’ in the parents question is not referring to your daughter. It’s referring to if you, the parents, are students and reported taxable student grants and scholarships on your return.
Ah, thank you! I was just reading about when they are taxable, I had not understood that!!!
I mis-typed, I was talking about box 5.
Box 2 is much higher than box 5. So, now I see, no one claims that as income. Whew, and thank you!
Box 2= 42,656
Box 5 - $21,423
When I was doing the Turbotax program, it did tell me qualified for the $2500 credit. However, when I printed my tax form out, on line 50 (education credits from form 8863 line 19) it states $1500. I have not clicked “file now” yet, should I go back and investigate that discrepency?
There may be some confusion because the full AOTC will show up as split amounts on two different lines of the form 1040 or form 1040A: the $1,500 non-refundable portion as “Education credits from Form 8863, line 19” (1040 line 50 or 1040A line 33), and the $1,000 refundable portion as “American opportunity credit from Form 8863, line 8” (1040 line 68 or 1040A line 44).
Hmm, I looked at form 8863. It gave us the 2500 credit, but then took 1000 away- something to do with refundable vs. no-refundable? Did we get the lesser amount because we did not owe taxes? We are fairly low-income… it seems weird we would not get the full amount. ?
$1000 of the AOTC is refundable. Is $1000 on one line of the return and $500 on a different line of the return for the AOC? If the first $500 of the credit brought your tax down to 0, then you can only get an additional $1000 as a refundable credit.
Those numbers look large. You didn’t answer whether box 7 was checked. It looks like some of those amounts are for spring 2015. Or did your daughter attend school in spring 2014 and you paid amounts in 2014 for spring 2014 semester? You can only use amounts you actually paid in 2014 for the 2014 AOC credit. Turbo tax should have had a question asking if all those amounts were actually paid in 2014.
@MiddKid86 Yes! You are correct, the two amounts are both there equalling $2500.
@annoyingdad Box 7 IS checked. But I assumed it should all be claimed since we did pay for the spring semester’s tuition in December 2014. So all of the amounts shown were paid by us durning the 2014 tax year. Not so?
Yes so, if you did pay for spring 2015 in December, you can use the expenses for 2014.
Oh, good, I don’t have to go back and try to figure out how to change that! Yes, we paid fall tuiton on 7/14/14 and spring tuition on 12/19/14. So it’s okay to leave it as is then?
Thank you, you guys have been SO helpful. It’s rough figuring this stuff out for the first time! Thank you.