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Old 03-19-2017, 12:23 PM
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AOC in case where Scholarship or Grants exceeds (box 5) Qualified tuition and related expenses (box 2)

A student has scholarship or grant - box 5 on 1098T is $5968 and his box 2 amount (for qualified expenses for tuition and related fees is ) is $3035.

Difference between this two --- $5968-$3035 - $2933 was given to him as refund by his school.

Now when he chooses this refund (additional amount he received after school charged tuition) as his income as well as taxable scholarship ...he does not qualify for American Opportunity credit but when he puts entire scholarship+grant amount of $5968 than he qualifies for $904 as refundable AOC.

Can someone confirm that this student can legally declare all his scholarship as his income as well as taxable scholarship?I was told that only excess should be reported but he can declare all scholarship money as taxable income in order to get AOC but he needs to check If the scholarship isn't required to be used for tuition and fees, you can allocate the whole scholarship to nonqualified expense (making it taxable). You'll need to review the terms of the scholarship to confirm.

Well in this case WA state need grant and Pell grant combined makes his scholarship ...does someone know if these two grants require you to be used for tuition and fees?



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