Hello, all,

I just want to confirm my understanding, as I have now spent several hours researching this topic.  I am not a professional tax preparer but have been filing my own returns for my entire adult life, and this 2019 US 1040 will include my fourth child's Education Credits or Deductions.

Her 1098-T Box 1 shows payments we personally made plus student loans in the amount of $12,791. 

Her 1098-T Box 5 shows Scholarships or grants in the amount of $15,175.  This is correct.

Subtracting Box 5 from this Box 1 amount would be negative, requiring reporting the differential as taxable income.  However, tuition itself was over $20K, so how could this be possible?  So I thought, hmmm...I am not sure about the calculation of this Box 1 amount, thinking it should be the total charges posted and received for the semester, including the amount covered by the scholarships.  Is this correct?  I did find the following Reminder near the beginning of Publication 970.

Reminder:
Form 1098-T, Tuition Statement. When figuring an education credit, use only the amounts you paid and are deemed to have paid during the tax year for qualified education expenses. In most cases, the student should receive Form 1098-T from the eligible educational institution by January 31, 2020. However, the amount on Form 1098-T might be different from the amount you actually paid and are deemed to have paid. 

So I am interpreting that Scholarships posted toward charges  are amounts "deemed to have paid."

Please confirm and clarify if necessary.  I do not want to get myself into hot water with the IRS!