Example 2 - Adjustments to Scholarships and Grants

Boxes Affected:

Box 5: Scholarships or grants
Box 6: Adjustments to scholarships or grants for a prior year

On September 19, 2007, Student Y was awarded $12,000 paid from the General Scholarship Fund for the Autumn quarter which began in September 2007. Form 1098-T for 2007 will show $12,000 in Box 5.

Student Y's 2007 Form 1098-T
Box 1 – blank Box 2 – $11,500 Box 3 – blank Box 4 – $0.00 Box 5 – $12,000 (General Scholarship issued for the Autumn term 2007) Box 6 – $0.00 Box 7 – This box will be checked if Student Y was billed for a future period.

In January 2008, the financial aid office removed the $12,000 General Scholarship Fund for the Autumn quarter, 2007. This reduction / transaction triggered an adjustment of $12,000 in Box 6 of the 2008 Form 1098-T (see below) because it effected a prior year.

In the same month (January 2008), the financial aid office posted $12,000 for the Autumn quarter, 2007 from the Memorial Scholarship Fund. This amount is shown in Box 5.

Student Y's 2008 Form 1098-T
Box 1 – blank Box 2 – $11,500 Box 3 – blank Box 4 – $0.00 Box 5 – $12,000 (Scholarships or grants posted in January 2008 for Autumn 2007 term - in our example here, the Memorial Scholarship Fund). This was the amount PREVIOUSLY reported on the 2007 1098-T.) Box 6 – $12,000 (This adjustment is recorded because it effects a transaction from 2007, the prior year.) Box 7 – This box will be checked if Student Y was billed for a future period.

Student Y's 2008 Form 1098-T

Box 1 – blank
Box 2 – $11,500
Box 3 – blank
Box 4 – $0.00
Box 5 – $12,000 (Scholarships or grants posted in January 2008 for Autumn 2007 term - in our example here, the Memorial Scholarship Fund). This was the amount PREVIOUSLY reported on the 2007 1098-T.)
Box 6 – $12,000 (This adjustment is recorded because it effects a transaction from 2007, the prior year.)
Box 7 – This box will be checked if Student Y was billed for a future period.

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