A taxpayer's qualifying child was a student who received a 2017 Form 1098-T with nothing filled in for Box 1 and a zero amount filled in for Box 2. He was at least a half-time student. An amount was paid during the first three months of 2017, but it was included on the 2016 Form 1098-T. The student though did not actually graduate until May of 2017. Is this 2017 Form 1098-T incorrect? What should I do in this situation?
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Facts trump forms. Probably the amount was billed in 2016 but not paid until 2017. That doesn't make the 1098-T wrong, assuming they are using the amounts billed in box 2. Thus I would treat the 2017 payment as a 2017 payment. If I didn't do the 2016 return I'd probably check to make sure they didn't include the 2017 payment on the 2016 return as well. -
Bursar's statement. Documents from parents and student detailing who paid what. when, and how. The Form 1098-T tells you little except that the student was a student, at least half-time, graduate student or not. It won't tell you much about payments. I have heard of some with Box 1 but not seen such a unicorn yet. I do see a few with the bursar's detail by calendar year on the back. Ask your client.Comment
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I had a 1098T this year that the top part of the page was the 1098T and the bottom part had a breakdown per year. Kind of nice.Comment
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Your software should have a place to enter the amount actually paid, if it is different than what Box 2 says.
Let the client know it is very possible they will receive an IRS notice denying the credit, and they just need to send proof of the payment (such as a printout of the financial account from the college showing what was paid in 2017).Comment
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