Question

My child’s Form 1098-T, Box 4 has an adjustment made for a prior year. Box 6 shows adjustments to scholarships or grants for a prior year. How does this 1098-T scholarship affect my return?

Answer

Regarding Form 1098-T, you must adjust your credit as if you made the adjustments last year, if you took one of these:

  • American Opportunity Credit
  • Lifetime Learning Credit

The difference between the original amount and the new amount from the 2016 return shows a tax liability. You’ll need to add this to the 2017 return. You don’t need to amend last year’s return. However, you might have to amend that return with Form 1040X if:

  • Any part of the scholarship was taxable.
  • You reported it on last year’s Form 1040, Line 7.

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