<p>Just now doing my taxes, and I printed my boys' 1098-T forms off of my parent account on their college's website. I noticed that this year, the amount shown on the 1098-T for "qualified tuition and related expenses" for both of them is about half of what it was in previous years. Now I know tuition has not decreased! Did the IRS change the definition so that they will now be taxed on more of their scholarship money? </p>
<p>No, no change in QEE. Sounds like an accounting timing issue. Box 2 shows amounts billed in 2013. Did the school bill in January where in the past they billed in December for 2nd semester? Check bills/online account statements for when QEE was billed, scholarships were credited and when you actually paid any amounts. Don’t rely on the 1098T without checking the source documents.</p>
<p>You do have to be careful, though, that you don’t take a credit for anything you already took a credit for in a past tax year. Of course, if you are like most … even a half year of tuition for two, less their scholarships/grants, will probably net you a full education tax credit! :)</p>
<p>@annoyingdad, thanks. I will look more carefully at that and will contact the university. The university should have billed Spring 2013 in January, and Fall 2013 in August. I don’t know how half could have been put in any other year. I know the bills were paid in January and August because that is when the scholarships post to their accounts.</p>
<p>@kelsmom, the “problem” (which of course is a blessing) is that my guys are on full merit rides. We don’t pay anything for their college, so no tax credit for us. So the issue isn’t a tax CREDIT, it is how much they will PAY in taxes on their scholarships. The tuition should have been about $10,000 in 2013, but the 1098T shows only half that, so they will have $5000 more to pay taxes on. We don’t claim them on our taxes, so that will help, but they will still pay much more in taxes this year than last.</p>
<p>Actually, didn’t they change computers to only being counted as a QEE if REQUIRED by the student’s program?</p>
<p>@thumper1, Computers? Are you saying that’s a change? I thought they always had to be “required” to “count”. My guys were not allowed to count their computers. Even textbooks are not always counted as a QEE. It’s ridiculous. </p>
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<p>Under what circumstances are you finding that a textbook is not considered a QEE?</p>
<p>A computer not having to be required by the school was only for 2009-2010. That’s not a recent change and only rarely would be on the 1098T anyway. Any book or supply required for a class is QEE.</p>
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It also depends on where you buy the book. AOTC:
Lifetime Learning Credit:
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<p>@MiddKid86 and @annoyingdad, I am not an accountant, but as I understand it, all textbooks can be counted as a QEE under the AOTC. But if you do not qualify for the AOTC, then different rules apply to textbooks. The rules as to what qualifies are different for those who do and do not qualify, based on income, for the AOTC. </p>
<p>I was talking about books and supplies in relation to being QEE for off-setting scholarships/grants which seemed to be your original question. I don’t see that your AOTC eligibility has any affect on that.</p>
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<p>Page 5, IRS Pub 970:</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>I think @annoyingdad was correct in that the low tuition amount I originally posted about must be a timing issue, although I don’t know how the university could have done that. </p>
<p>Just pulled out my boys 2012 taxes, and they paid taxes on the difference between Box 5 and Box 2 on the 1098-T. I remember asking my CPA if I needed to provide anything else as to expenses for books, etc., and I was told no. Anyway, I am dropping off tax info today, and will ask the CPA about it.</p>
<p>It’s distressing from posts on this forum how many accountants seem not to be familiar with the details of education related tax matters. Or they just want to get as many returns done as possible and don’t want to take the time to deal with bills/account statements,receipts etc. and just use the 1098T.</p>
<p>@annoyingdad, thank you for that link. Page 5 is helpful as to the scholarships. I recall my CPA saying we didn’t need to provide info as to cost of textbooks, etc. What I recall as to the treatment of textbooks is similar to the language under section 6 Tuition and Fees Deduction, it says: “Related expenses. Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.” But I am not sure how/why certain provisions were/were not applicable to either of my sons. Anyway, I’m on my way to the CPA to drop of 2013 tax info, and I now have a bigger list of questions.</p>
<p>Thanks for the help. My brain hurts. This is why I changed my major out of accounting after one semester!</p>
<p>Yes, each section of Pub 970 has it’s own definition of QEE for the purpose of that chapter, but there’s nothing that says the definition in one chapter changes the definition in other chapters.</p>
<p>Glad I asked the CPA. Looks like mistakes were made by not including some of my son’s expenses on his past 2 years’ taxes, so the CPA will amend and refile those 2 years, and my son should get a refund. </p>