If you're a student, or the parent of a student, you might not think you're eligible for an education credit if the scholarships shown on your 1098-T exceed the tuition payments received by the university.

However, with a certain type of unrestricted scholarship, a student can declare some of it as income and claim an education credit after all.

This video describes how this is done and gives a couple of examples of how this works.

The IRS has no problem with this strategy, and even encourages its use.

For a refresher as to how the American Opportunity Credit works, click here: [ Ссылка ]

If you'd like to know more about "Kiddie Tax," click here: [ Ссылка ]

Additional Resources and Information:

IRS Publication 970: "Tax Benefits for Education": [ Ссылка ]

IRS Form 8863: "Education Credits": [ Ссылка ]

IRS Schedule 1 (Form 1040): "Additional Income and Adjustments": [ Ссылка ]

Stackexchange.com: "Voluntarily treat scholarships as taxable income to get AOTC?" [ Ссылка ]

The Tax Geek on the Site Formerly Known as Twitter: @taxgeekusa

The Tax Geek on Reddit: www.reddit.com/r/askataxgeek

Image and footage credits:

Storyblocks.com

The images of "Alvin," "Maryanne," "Darrin," and "David" were generated by thispersondoesnotexist.com (stability.ai) and any resemblance between these images and any person, living or dead, is coincidental and not intentional.
*No other artificial intelligence was used to research, write, animate, voice, or edit this video*

Intro Music: "Bluesy Vibes" - Doug Maxwell - YouTube Creator Music

Outro Music: "Modern Attempt" - Track Tribe under license from YouTube Creator Music

DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or financial advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or financial professional.

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