Housing credit reported on 1098-T as if it were a tuition credit

Paying for College
1

Hello

We have received our son’s 1098-T and the amount in box 1 is lower than we expected by an amount which is equal to a “housing credit” that we received because he vacated his dorm room early in the spring as requested by his university due to the Covid situation.

As housing is not a qualified educational expense, we did not expect that the housing credit would be considered a qualified educational credit.

So, should we consider that this “housing credit” is in fact a tuition credit and that it lowers our qualified educational expense, or can we consider it is a proper housing credit and add back the amount to what is reported in box 1 when reporting our educational expenses?

Thanks!

2

It’s possible that the credit was paid for with CARES Act funding. I honestly have no idea whether or not this makes a difference, but it very well could. My suggestion is to contact the Bursar & ask. I did a little searching, and I found out that CARES Act funds shouldn’t be on the 1098-T, though, so maybe that’s not it (IRS Issues Guidance on 1098-T Reporting for HEERF Emergency Grants to Students). I suggest calling the Bursar.

3

Thanks

4

1098-T Box 1 is for the school to report “Payments received for qualified tuition and related expenses.” Related expenses means expenses, other than tuition, that are qualified for tax credits. Room and board expenses are not qualified expenses for tax credits. I can understand a refund issued for tuition having an impact on the Box 1 entry, but it makes no sense to apply a refund specifically for housing to that entry. I agree with kelsmom that you should contact the Bursar, or whichever office is responsible for producing the 1098-T forms.

5

Thanks! Indeed, the strange thing is that a credit named “housing credit” which was given in exchange for vacating a dorm room early is basically being reported as if it were a tuition credit. After raising the issue on a parent Facebook group, it appears that everybody that has gotten this credit is seeing the same thing on their 1098-T. We will follow up with the University.