Hello
May be not the right place to ask this question but first time having to deal with this. I have very simple tax return so do it myself. My child is a covenant fellow and everything is covered under grants and fellowships. He got form 1098 T.
My question is who submits this form and if I submit on my tax return does he has to pay taxes for the amount he spent on room and board.
Any Help. Thank you.
These type of questions are usually posted on the Financial Aid & Scholarship board.
As I understand it, the taxable part of the scholarship is taxable income on the student return. Any scholarship that was not used to pay QEE (Qualified Educational Expenses) is considered taxable income. In addition, you should be able to claim part of the tax free scholarship as taxable in order to claim the AOC. You will need to run the numbers to see what is the best option. I urge you to read IRS Publication 970.
You need understand what is included on the form. In the past, UNC-CH reports the current fall and next year’s spring bills on the form. This assumes the bills was paid by the due date. In my case (and likely yours), the scholarships were not applied until January. For this reason, I applied for an extension and paid in January. IRS PUB 970 will explain how you can handle this situation.
Thank you so much.