In the last two years, my D’s school billed fall and spring expenses in July and November, and applied aid in August and December.
The 1098T for those two years showed qualified tuition and fees billed for fall and spring, and scholarships and grants paid for fall and spring, for the same year.
This year the second semester started later than usual in January, and the school did not apply the spring semester aid in December, but in January instead.
So now I have two semesters of billed tuition and fees, and one semester of scholarships and grants on the 2017 1098T.
I made sure that I paid the spring bill in December so I could count it as payment for 2017.
My D has a $15,000 per semester tuition scholarship, and the one semester $2,000 state grant can be used for room and board, so she reports it as taxable income on her return, and I claim the qualified fees for AOTC.
So the 2017 1098T listed $31,000 (2 semesters of tuition and 2 semesters of fees) in box 2 for billed qualified tuition and fees, and $17,000 (one semester of tuition scholarship and one semester of state grant) in box 5 for scholarships or grants
The Turbotax interview was a bit confusing but it asked what I actually paid in QEE and I entered $1,000 for the fees for both semesters.
It did not give me an AOTC credit because I also entered the scholarships from box 5.
Then I changed the number for qualified expenses to $16,000 ($15,000 for tuition and $1,000 for fees).
It then calculated a $1,000 AOTC.
QEE $16,000
Scholarships $17,000
Scholarship used for room and board $2,000
Tax free scholarship $15,000
QEE minus tax free scholarship = $1,000 >>AOTC
Will I be able to offset the tuition scholarship for spring that will be reported on the 2018 1098T with the tuition that was billed and listed on the 2017 1098T for next year’s taxes?
Also, since my D only received the fall semester state grant in 2017, she only has to report that on her 2017 return, correct?
And she would report the spring semester grant on her 2018 return?
That might actually work out well for her. The $2,000 grant is less than $2,100 so she doesn’t have to pay kiddie tax this year (she also had $5,000 work income).
And next year she will presumably have a higher standard deduction ($12,000).