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Unqualified Education Expense on Taxes?

Asked by: flash 727 views YA Discussion

My wife received $ 8,800 in free scholarships while her tution was only $ 8,000. Im curious of how to answer the “Amount of the above used for unqualified education expenses:” question. She used $ 3,960 for room/meal plan of her scholarship. Yet, when I entered that in, it actually causes my refund to increase which doesn’t seem correct as shouldn’t we have to pay taxes on the unqualified part? Can someone please help me understand this.

1 Answers

  1. Judy on Mar 11, 2013 Reply

    Room, board and meals can’t be used for an education credit. Those are unqualified expenses. $ 800 or the amount would be taxable income unless she qualifies for the American Opportunity credit and used that amount on required books and supplies – for AOC those are qualified expenses.

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