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Level 2
posted Feb 11, 2023 1:08:06 PM

1098 t filing federal but what state do i include Excess income in?

Two sons in college in Virginia. 

We're residents of New Jersey

1098 t Scholarship and Grants box 5 is greater than Box1 Payment receipts.

We have included the difference as other income on the my son's Federal return. Turbotax handled it nicely.

Our Resident State of New Jersey automatically (using Turbotax) included that extra income in NJ States tax return.

Do I also have to include that extra income in Virginia's state tax return?

0 2 359
2 Replies
Level 15
Feb 11, 2023 3:23:59 PM

Q. Do I also have to include that extra income in Virginia's state tax return?

A.  No.  

TurboTax (TT) will automatically include the taxable scholarship in the AGI that transfers to the VA state return.  But, when you get to the allocation screens, you allocate the scholarship income as non VA source.  Despite the school being in VA, it is not  considered VA source income. It is done that way in most states.

Level 2
Feb 14, 2023 10:07:17 AM

Thank You, I appreciate it!