TP works for University & has imputed income for tuition benefit for spouse and non-dependent children. Spouse 1098T shows tuition with offsetting scholarship amount. The imputed income is taxed so spouse allocation should be deductible for education expenses, even though 1098T shows it all covered by scholarship?
Because the imputed income includes tuition benefit for non-dependent children, there is no recourse?
$9,600 in Box 2 & 5
After $5,250 exemption & discounts, $3,655 imputed income included in W2.
Yeah, I can see your dilemma. College should have only included the first $5,250 as scholarship (tax free assistance), unless the spouse had other outside scholarships. Then it would free up the imputed income as tuition paid by tax-payer. You can try to get college to correct but not likely to happen. Only workaround I can see is Line 3 of Part V of student info sheet in which amount included as imputed income can be entered. Imputed income is taxable and eligible for education credits.
