1098-T with a $380 adjustment. How to deal with it.

[ATSMAN]

Taxpayer received a 2019 1098-T with a $380 adjustment in box 4. So that is an adjustment for 2018 tax year. She was a dependent on her parent's tax return and they could not get any AOC because their AGI was over the limit for AOC credit.

She is now in Graduate school at another university and get a 1098-T with Graduate box checked and Box 1 was $22,000. She is filing on her own.

Can I ignore the 2019 1098-T with adjustment because no AOC was allowed in 2018, or must she reduce the LLC credit for 2019??

Never ran into this situation before.

[EvenKeelTax]

What is in box 5 of that 1098T? Maximum lifelong learning credit is $2000 based on $10,000 of expenses assuming AGI doesn't phase it out. With $22,000 of expenses you have a lot of wiggle room unless box 5 has a high number for tax-free assistance.

[Kram BergGold]

You ignore the 2018, $380 adjustment.

[ATSMAN]

Thanks for the response. That is what I thought because in 2018 no AOC was allowed (MAGI too high).