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We are using Turbo Tax to help file our income taxes, as we have in the past. However, I have questions concerning education credits for college for our student who is a junior for 2012-2013.

Even though taxes will be owed for scholarship amounts going toward non-qualified expenses, Turbo Tax comes up with the American Opportunity Tax Credit for $1.00 on the parents tax return. The tax for scholarship for non-qualified expenses would be going on the college students return as I expected.

I just think that is strange that any credit is given. Can anyone help explain this? Can we avoid taking the $1.00 credit?

Also, one class was taken at a junior college this summer, so how should that be considered...part or full time?

Thanks.
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Also, the junior college sent a 1098T for that one summer class.
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I just think that is strange that any credit is given. Can anyone help explain this? Can we avoid taking the $1.00 credit?

Also, one class was taken at a junior college this summer, so how should that be considered...part or full time?


First the low-hanging fruit. Is the "half time" box checked on the JC 1098-T? (The criterion is at least half time, not full time.)

Now I urge you to put aside both TT and the 1098-T for the school involving the scholarship and replace them with his school account record, Pub 970 and scratch paper. You have some degree of flexibility in how you calculate things, and you should do so to your best advantage. Don't rely on the notoriously bad numbers on the 1098-T.

Assuming you are claiming him as a dependent, taxable scholarship amounts would wind up on his return and any credit on yours. I just don't trust your method so far in determining what those numbers should be.

Phil
Rule Your Retirement Home Fool
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Phil,

We have been blessed with great scholarships and know that any scholarship funds that go toward non-qualified expenses are taxable.

Have assumed that the 1098T from the colleges are accurate... So, will have to check those figures.

Just can't imagine that $1.00 credit is really needed since taxes are owed on scholarship money for those non-qualified expenses.

The 1098T from the JC summer class does NOT have any boxes checked. The 1098T from the regular Fall/Spring university DOES have full time box checked. Turbo Tax does not seem to be able to distinguish their difference for some reason.

Seems it should be more simple to figure overall.

Thank you for your feedback! Appreciate it.
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Sorry...I meant Box #8, for At Least Half Time Student.
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The 1098T appears to be accurate.
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