1098-T as a grad student with health insurance

DanielR

Hi, I got a 1098-T form in addition to a W2 as a grad student, however the amount of money on the 1098-T Box 1 (Payments received for tuition) is less than Box 5 (Scholarships) because my health insurance is also paid through a scholarship. Is the difference between the two considered additional income, and am I taxed on it? And if so where would I report it as such?

JohnV

Yes, the difference between box 5 and box 1 of Form 1098-T is taxable income, if the scholarship amount is more than the tuition and other educational expenses. The IRS does not considered health insurance as education expenses. You can see what other education expenses you can add to reduce the amount of the scholarship here: https://www.irs.gov/credits-deductions/individuals/qualified-ed-expenses

In FreeTaxUSA, you can report the taxable scholarship amount in the Income > Other Income > Taxable Scholarships or Grants.