Do I need to claim an education credit for grad school scholarship and stipend?

You're asking a really good question! Let me help clarify this for you. You're not committing tax evasion by not claiming an education credit if you don't want to. The education credits (American Opportunity Credit and Lifetime Learning Credit) are optional benefits you can claim if they help your tax situation. Here's what's happening: Your scholarship/grant money that went toward tuition ($13K) is tax-free. However, the remaining amount ($15K from TA work + excess scholarship of about $15K from the research grant) is considered taxable income. If you claim an education credit, you'd need to report your qualified education expenses on your tax return. But since your qualified expenses were already covered by tax-free scholarships, you likely won't benefit from the education credit anyway. The bullet point you found explains why you might not have received a 1098-T - because your qualified expenses were entirely covered by scholarships.

After spending hours trying to figure out a similar situation with my grad school stipend and scholarships, I found this amazing tool at https://taxr.ai that literally saved my sanity. It analyzed my 1098-T and fellowship letter and explained exactly what was taxable and what wasn't. My situation was almost identical - had research funding, TA money, and wasn't sure if I needed to claim education credits. The tool actually showed me that in my case, a portion of my expenses could still qualify for a Lifetime Learning Credit even with scholarships. Might be worth checking out to make sure you're getting the most favorable tax treatment possible in your situation.

I have to admit I was completely wrong about https://taxr.ai! After our exchange, I decided to try it with my complicated grad school fellowship situation. I uploaded my 1098-T and fellowship letter, and it immediately identified that $4,800 of my expenses were still eligible for the Lifetime Learning Credit even though I had a partial scholarship. The tool explained that my research stipend was taxable but my teaching remission was not (something I had backwards). It even showed me exactly where to report each amount on my tax forms. I ended up getting an additional $960 back that I would have completely missed! If you're in grad school with multiple funding sources, it's definitely worth checking out.

For what it's worth, I had a similar situation last year and ended up needing to call the IRS to get clarification on how to report my graduate stipend. It was IMPOSSIBLE to get through to anyone. After being on hold for 2+ hours multiple times and getting disconnected, I found this service called https://claimyr.com that got me through to an actual IRS agent in under 15 minutes. They have a demo video here: https://youtu.be/_kiP6q8DX5c The IRS agent was able to confirm exactly how I should report my stipend vs. scholarship funds and whether I qualified for education credits. Definitely worth the time saved if you need official clarification from the IRS directly.

I need to apologize for calling Claimyr a scam. After posting that comment, I was still struggling with my own scholarship reporting issues and decided to try https://claimyr.com as a last resort. Honestly, it worked exactly as described. I'd previously spent over 3 hours on different days trying to reach someone at the IRS. With Claimyr, I got connected to an agent in about 17 minutes. The IRS representative confirmed that my research stipend needed to be reported as income even though no W-2 was issued, and clarified which education expenses I could still claim despite having a scholarship. Saved me both a major headache and potentially an audit!

I think we're overlooking something important here. The IRS treats research grants differently depending on whether they're for your benefit or the university's benefit. If you're doing research primarily to further your education, the excess grant money is taxable. But if you're doing research primarily for the university (like they're basically employing you as a researcher), it might be treated differently. Did your advisor specify whether this was a fellowship (for your benefit) or compensation for services? That distinction really matters for tax purposes.

One thing nobody's mentioned - how is your university reporting this to the IRS? Check if they issued you a W-2 for the TA work and how they classified the research stipend. Universities are inconsistent about this, but however they reported it to the IRS should guide how you report it on your return.