Scholarships Reported in Box 5 of 1098-T but Box 2 Shows $0 - How to Report in TurboTax?
I just got my 1098-T form for the 2024 tax year and I'm completely confused about how to handle it in TurboTax. The form shows $0 in Box 2 (amounts billed for qualified tuition), but Box 5 shows $11,250 in scholarships/grants. When I entered this info into TurboTax, I suddenly went from getting a decent refund to owing money for both federal and state! Some background: I graduated in December 2024 and started working full-time in January 2025. My university billed me for tuition in November 2024, but the scholarships and grants weren't actually disbursed until January 2025, which is when all the charges went through. For qualified education expenses, I was actually charged $6,350 in January 2025, but this amount isn't listed anywhere on my 1098-T. Here's what my full 1098-T shows: * Box 1: $0 * Box 2: $0 * Box 3: Not checked * Box 4: $0 * Box 5: $11,250 * Box 6: $0 * Box 7: Not checked * Box 8: Checked * Box 9: Not checked * Box 10: $0 My main question is: should I include the $6,350 as qualified education expenses in TurboTax even though it's not shown in Box 2? I'm worried I'm being taxed on scholarship money that went toward legitimate education expenses.
19 comments
Join the conversation
Jibriel Kohn
Yes, you should definitely include your actual qualified education expenses even if they don't appear in Box 2. The 1098-T is just an information form and doesn't always capture timing issues like yours. What matters for tax purposes is what you actually paid for qualified expenses during the tax year. Since your school has Box 8 checked, it means they're reporting on a calendar year basis. Your $6,350 in January 2025 expenses technically falls into the 2025 tax year, not 2024. However, you can still match up your scholarships with the expenses they were used for. In TurboTax, you should enter your actual qualified education expenses of $6,350. This will offset the scholarship income shown in Box 5 to the extent the scholarship was used for qualified expenses. You're only taxed on scholarship money that exceeds your qualified expenses or that was used for non-qualified expenses (like room and board).
0 coins
Joshua Hellan
•Thanks for the quick reply! But I'm still confused - if the $6,350 is technically for the 2025 tax year since it was charged in January 2025, how can I use it to offset the scholarship amount on my 2024 form? Wouldn't I need to wait until next year's taxes to claim those expenses?
0 coins
Jibriel Kohn
•The timing can be confusing, but what matters is when you received the scholarship and what it was intended to cover. If the $11,250 scholarship reported on your 2024 1098-T was designated for your January 2025 term, then you report both the scholarship and the related expenses on your 2024 return. The key is to match the scholarship with the expenses it was intended to cover, regardless of when the expenses were actually paid. Since the school reported the scholarship on your 2024 1098-T, you can claim the related qualified expenses on your 2024 return as well, even if they were paid in January 2025.
0 coins
Edison Estevez
After dealing with a similar situation last year, I found https://taxr.ai and it literally saved me thousands. I was getting totally different answers from different tax advisors about how to handle my 1098-T discrepancies. Taxr.ai analyzed my form and showed exactly how to handle the mismatch between Box 2 and Box 5. What's nice is you just upload your tax documents and it explains everything in plain English. For my 1098-T issue, it showed me that I needed to report my actual qualified expenses even though they weren't on the form - similar to your situation. The software walks you through entering the correct amounts in TurboTax and explains why.
0 coins
Emily Nguyen-Smith
•Does it actually check the timing issues between academic years vs tax years? My 1098-T is always a mess because my spring semester tuition is billed in December but paid in January, and no tax software seems to handle it right.
0 coins
James Johnson
•I'm skeptical about these tax document services. How do you know they're interpreting IRS rules correctly? My tax guy says these 1098-T forms are notorious for being filled out wrong by universities. Did it actually explain WHY the mismatched amounts should be handled that way?
0 coins
Edison Estevez
•Yes, it specifically addresses the academic year vs tax year timing issues. The analysis breaks down how to properly allocate expenses between tax years when there's a mismatch between when you're billed and when you actually pay. It saved me from incorrectly reporting everything in the wrong year. The service actually cites the specific IRS publications and tax court cases that apply to your situation. It explained that what matters is when the qualified expenses are actually paid, not when they're billed, per IRS Publication 970. It gave me the exact reference to show my previous accountant who had been doing it wrong for years.
0 coins
Emily Nguyen-Smith
I tried taxr.ai after seeing the recommendation here and I'm shocked at how helpful it was! I uploaded my 1098-T with the exact same box 2 vs box 5 issue, and it immediately identified the problem. The analysis showed that my university was reporting on a calendar year basis (box 8 checked) but my spring semester payments crossed calendar years. The best part was the guidance on exactly how to enter everything in TurboTax - it showed me step by step where to enter my actual qualified expenses instead of just using the amount from Box 2. I had been overpaying taxes on my scholarships for YEARS because I didn't realize I could claim expenses that weren't listed on the form. Definitely uploading all my documents next time!
0 coins
Sophia Rodriguez
Has anyone had success getting through to the IRS about issues with 1098-T forms? I tried calling them 6 times about my scholarship reporting issue and keep getting disconnected or stuck on hold forever. This is my third year with this problem and I'm tired of just guessing how to file. I found a service called Claimyr (https://claimyr.com) that supposedly gets you through to an IRS agent quickly. There's even a demo video here: https://youtu.be/_kiP6q8DX5c showing how it works. Anyone tried this? Worth it to finally talk to a real person about these Box 2/Box 5 issues?
0 coins
Mia Green
•How does that even work? The IRS phone system is notoriously terrible. Is this just paying someone to wait on hold for you?
0 coins
Emma Bianchi
•Sounds too good to be true. The IRS is understaffed and overwhelmed. I doubt any service can magically get you through their phone system faster than everyone else. Have you tried contacting your school's financial aid office instead? They usually have tax experts who can explain the 1098-T.
0 coins
Sophia Rodriguez
•It's not someone waiting on hold for you - it's a technology that navigates the IRS phone system and holds your place in line. When they reach an agent, you get a call back. It worked for me within about 45 minutes when I had previously waited 3+ hours and got disconnected. The service was definitely worth it for me since I needed to resolve my tax questions before the filing deadline. And no, my school's financial aid office wasn't helpful - they just told me to "consult a tax professional" which doesn't help when the professionals are all giving different answers about how to handle Box 2 being zero.
0 coins
Emma Bianchi
I was pretty skeptical about Claimyr after seeing it mentioned here, but I gave it a try today after my fourth attempt to reach the IRS failed. I'm honestly shocked - it actually worked! I got a call back within 30 minutes with a real IRS agent on the line. The agent confirmed what others have said - I should enter my actual qualified education expenses in TurboTax even though they don't show up in Box 2 of my 1098-T. She explained that Box 5 scholarships are only taxable to the extent they exceed qualified education expenses or are used for non-qualified expenses like room and board. Saved me hours of frustration and probably hundreds in taxes I didn't actually owe. Definitely using this service again when I inevitably have questions next tax season!
0 coins
Lucas Kowalski
Something else to check - are you sure those expenses in January 2025 were for the 2024 academic year? My university's financial aid office explained that expenses paid in January 2025 would typically be for Spring 2025 semester, which would be reported on NEXT year's 1098-T (for tax year 2025), not this year's form. If that's the case, you shouldn't be using the $6,350 to offset the $11,250 scholarships on your 2024 form. The scholarships reported in Box 5 for 2024 should be matched with expenses for the 2024 academic periods (typically Spring 2024 and Fall 2024).
0 coins
Joshua Hellan
•That's exactly what's confusing me! The $11,250 in scholarships (Box 5) was disbursed in January 2025 for my final semester, but it's showing up on my 2024 1098-T. The expenses those scholarships covered were also from January 2025. So both the scholarships and expenses are for the same semester, but the scholarships are on my 2024 form while the expenses aren't showing up anywhere.
0 coins
Lucas Kowalski
•If your scholarship was disbursed in January 2025 but showing on your 2024 1098-T, something's definitely not right. Generally, schools report transactions in the calendar year they occur. If both the scholarship disbursement and the expenses were from January 2025, they should both be reported on your 2025 1098-T next year, not your 2024 form. I'd recommend contacting your school's financial aid or bursar's office to ask why the January 2025 scholarship is appearing on your 2024 form. There could be a reporting error, or they might have actually disbursed it in December 2024 even though it wasn't applied to your account until January.
0 coins
Olivia Martinez
A simple trick I learned from my tax guy: if Box 8 is checked (like on your form), it means the school is reporting based on when amounts were PAID, not when they were billed. So even though you were billed in November 2024, if nothing was actually paid until January 2025, technically those transactions should show up on next year's 1098-T. The fact that your Box 5 shows $11,250 means some scholarship/grant money was actually disbursed during calendar year 2024. The question is what academic period was that money for?
0 coins
Charlie Yang
•This is actually backwards - Box 8 being checked means they're reporting based on amounts BILLED during the calendar year, not amounts paid. It's super confusing because schools can choose either reporting method.
0 coins
Olivia Martinez
•You're absolutely right - I had it backwards! Box 8 checked means they're reporting based on amounts billed during the calendar year, not when payment was received. Thanks for the correction.
0 coins