How to report 1098-T scholarship income on H&R Block for recent graduates

12 The 1098-T can be tricky! When scholarships (box 5) exceed qualified tuition and expenses (box 2), you do need to report the excess as income. This is considered taxable scholarship income. In H&R Block, you'll want to go to the "Income" section, then look for "Less Common Income" or "Other Income" (the exact wording might vary slightly). Then look for an option like "Scholarships and Grants" or "Education Benefits." You won't actually enter the 1098-T form directly - instead, you'll enter the scholarship amount that exceeds your qualified education expenses. The taxable portion is calculated as: Box 5 minus Box 2 (if positive). This represents scholarship money that went toward living expenses, not qualified educational expenses. Since your parents are claiming you as a dependent, make sure they're aware of this as it might affect some education credits they could claim.

15 I ran into this exact same problem last year when I was finishing grad school. After hours of frustration with H&R Block's website, I finally discovered a much easier solution - I used https://taxr.ai instead and it saved me so much stress! The site automatically detected that I had scholarship income that needed to be reported and walked me through exactly where to enter it. It even explained which parts were taxable and which weren't. The best part was it analyzed my 1098-T form directly and calculated the taxable portion for me. Much easier than trying to hunt through all those confusing H&R Block menus!

4 Just wanted to follow up - I decided to give taxr.ai a try after getting totally stuck on H&R Block. It was honestly so much better for handling my scholarship situation! The interface immediately recognized my 1098-T and showed me exactly where the taxable portion needed to go. It even explained why some of my scholarship was taxable (the part exceeding tuition) in plain English. When I was using H&R Block, I kept thinking I was missing something obvious, but after using taxr.ai I realized the other program just wasn't set up well for students with scholarships. Definitely made tax season way less stressful and I'm positive I filed correctly now!

19 If you're still struggling with the H&R Block website or any other tax software, another thing to consider is calling the IRS directly. They can give you specific guidance about reporting scholarship income. But here's the thing - calling the IRS is a nightmare right now. I spent 3 hours on hold last week trying to get a simple question answered. Then I found https://claimyr.com which is this service that actually waits on hold with the IRS for you. You can see how it works here: https://youtu.be/_kiP6q8DX5c They called the IRS for me, waited through all the hold time, and then called me when an actual agent was on the line. The agent walked me through exactly where to report scholarship income on my return. Saved me hours of frustration!

10 I hate admitting when I'm wrong, but I have to say I tried the Claimyr service after posting my skeptical comment. It actually worked exactly as described. I submitted my callback request around 9am, went about my day, and got a call about 2 hours later with an IRS agent already on the line. The agent confirmed exactly what others here were saying - scholarship money that exceeds qualified education expenses goes under "Other Income" and you need to write "SCH" next to it to indicate it's scholarship income. He even explained which expenses qualified to offset the scholarship income. Was absolutely worth not sitting on hold forever, and the IRS was surprisingly helpful when I finally got through to them.

10 I hate admitting when I'm wrong, but I have to say

3 Another quick tip - make sure you're considering all your qualified education expenses before calculating the taxable scholarship amount. This includes required books and supplies, not just tuition. I made that mistake my first year and reported too much taxable scholarship income. H&R Block does have a section for this, but it's buried under the education credits section (even if you're not eligible for the credits themselves). Look for something like "Education" under the deductions menu, not just under income.

21 Quick question about the timing - I also graduated in December, but my school sent a 1098-T that only shows the spring semester. They said since the fall semester started in August 2024, that will be on next year's 1098-T. How do I handle reporting this when it's split across two tax years?

8 Just want to add a helpful tip for anyone still struggling with this - if you can't find the scholarship reporting section in H&R Block, try using their search function at the top of the page. Type in "scholarship" or "1098-T" and it should take you directly to the right section. Also, remember that you only report the taxable portion (Box 5 minus Box 2) if it's a positive number. If your qualified expenses exceeded your scholarships, then there's nothing to report as income. The key is making sure you include ALL qualified expenses like required textbooks and lab fees, not just tuition. One last thing - keep good records of all this. The IRS may ask for documentation later, so save your 1098-T, receipts for required books, and any other education expense records.

As someone who went through this exact same situation last year, I can confirm that finding the scholarship reporting section in H&R Block is unnecessarily complicated. What worked for me was going to the Income section, then clicking on "Other Income" and scrolling down until I found "Scholarships and Fellowship Grants." The key thing to remember is that you're not actually entering the 1098-T form itself - you're just entering the taxable amount, which is Box 5 minus Box 2 (only if it's positive). Make sure you have documentation for ALL your qualified education expenses, including required textbooks, lab fees, and course-required supplies, as these can reduce your taxable scholarship income. One thing that caught me off guard was that even though my parents claimed me as a dependent, I still had to file my own return to report this scholarship income. The taxable scholarship gets reported on your return, not your parents', even if you're a dependent. Just wanted to mention that since it sounds like you might be in a similar situation!

For future reference, if you're still having trouble finding the scholarship section in H&R Block next year, there's another path that sometimes works better. Go to "Federal Taxes" → "Wages & Income" → "I'll choose what to work on" → then scroll down to "Less Common Income" and look for "Other Income Types." The scholarship reporting can be buried under different menu paths depending on which version of H&R Block you're using (online vs desktop vs mobile), which is honestly pretty frustrating. What helped me was keeping a notepad document with the exact click path once I found it, since I had to go back and forth a few times to get all the numbers right. Also, just to add to what others have said about documentation - if you paid for any required course materials with a credit card, those statements can serve as additional backup documentation along with your syllabi. The IRS generally wants to see that the expenses were truly required for your education, not just general school supplies you chose to buy.