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Entering Form 1098-T box 5 - scholarships

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Entering Form 1098-T box 5 - scholarships

There's no specific field to enter scholarships, fellowships, or grants received on a Form 1098-T box 5. But  nontaxable scholarships may reduce the amount of education expenses eligible you're eligible to claim for education credits and the tuition deduction, and taxable scholarships need to be reported as income. See IRS Publication 970 to determine whether the scholarship is tax-free, then follow the steps below that apply.

To enter an adjustment for tax-free scholarships:

  1. Go to Screen 38.1, Education Credits/Tuition Deduction.
  2. Scroll down to the Current Year Expenses subsection.
  3. In the Qualified tuition and fees (net of nontaxable benefits) field enter the net amount of 1098-T box 1, and 1098-T box 5.

To report a taxable scholarship as income:

  1. Go to Screen 14.1, SS Benefits, Alimony, Miscellaneous Inc.
  2. Scroll down to the Alimony and Other Income section.
  3. Enter the taxable portion in Taxable scholarships and fellowships.

Lacerte will include this amount as wages on Form 1040 with a description of "SCH".

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