Scholarship

[Gary]

I have a client whose scholarship was greater than the tuition and books. She used the excess money for room and board at the school. The portion of scholarships not used for education go on line 21. If the scholarship was also used for room and board, is this considered "used for education"?

[Gary2]

I have a client whose scholarship was greater than the tuition and books. She used the excess money for room and board at the school. The portion of scholarships not used for education go on line 21. If the scholarship was also used for room and board, is this considered "used for education"?

No, the phrase used in the Pub. is "qualified education expenses", and it generally needs to go on line 7. See Chapter 1 of Pub. 970.

[Gretel]

I have a client whose scholarship was greater than the tuition and books. She used the excess money for room and board at the school. The portion of scholarships not used for education go on line 21. If the scholarship was also used for room and board, is this considered "used for education"?

I believe the income goes on line 7.

[Gary]

Correct

Your correct, but I haven't figured out in my software how to get it on that line.

[Gary]

Another Question

If the scholarship is not restricted to Tuition and Books, can you selectively use some or all the scholarship for room and board to maximize the credit?

[Gretel]

Yes, but such scholarships are hard to come by. They are out there.

[thomtax]

Your correct, but I haven't figured out in my software how to get it on that line.

If you use Drake and it is either the taxpayer or spouse, go to screen 3 - Income. There is a line for scholarships not reported on W2. It will carry to line 7 and print Sch and the amount on the line.

LT

[ddoshan]

On our software you just use the same screen used for entering W2's and it gives us a choice to enter code S for scholarship (for W2 type). This then carries the excess scholarship/ grant money to line 7 marked SCH.

[RitaB]

On ATX

With ATX, you right click on line 7, then pick the option that is NOT W-2 entry, and it takes you to a worksheet where you enter it. And, just an observation, if IRS would audit these kids getting a ton of financial aid, they'd find some missing tax dollars. Maybe check into how the parents live on $12,000 a year business income, too. And, if we'd stop handing out so much financial aid, my kids' tuition wouldn't be so high. Just saying.

[Burke]

Paul Ryan's budget plan had one item that I kind of agreed with; freeze Pell Grants at their current level. And there was an absolute uproar. The world is going to end..... NIMBY....

[RitaB]

Yeah, and when

Paul Ryan's budget plan had one item that I kind of agreed with; freeze Pell Grants at their current level. And there was an absolute uproar. The world is going to end..... NIMBY....

Yeah, and when Mr. Romney made a comment that kids could borrow money from their parents for school, he was the devil. Who do people think is paying for all these goodies we are handing out? Why NOT have families figure out for themselves how to get their kids, that they brought into this world, through school?

[Gary]

Thank You All

Yes, my software also let's me enter it through a W-2 with code S.