According to IRS Publication 970 Tax Benefits for Education, qualified education expenses paid by a dependent, or by a third party for that dependent, are considered paid by you.
To capture these funds, the college sends a Form 1098-T Tuition Statement to the student. It reports:
- payments received for qualified tuition and related expenses
- amount billed for qualified tuition and related expenses
- amount of scholarships and grants administered and processed for the student by the college
- if the student was considered enrolled at least-half time
- if the student was a graduate student
To enter or review the information for Form 1098-T in TaxAct:
- From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
- Click Education to expand, then click Student Worksheet (tuition, scholarships).
- Click + Add Student Information to create a new copy of the form or click Edit to review a form already created.
- Continue with the interview process to enter all of the appropriate information.
- If you haven't yet added the Form 1098-T, after the screen titled Educational Institution, you'll see a screen titled Student Information - Form 1098-T. Click Yes to add a new copy of the form. If you've already added the Form 1098-T, you'll see a screen titled Tuition Statement - Summary and you can review or add the form.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.