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cjdobber
New Member

1098-T information on federal return is showing as W-2 information of City of Lansing return

I entered 1098-T information, for a scholarship I received, on my federal return.  While working on my City of Lansing city return I have an extra W-2 enter with information from the 1098-T.  TurboTax seems to think the scholarship I received is W-2 income.  Anyone come across this?  Is this a TurboTax bug?  Thanks in advanced.

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1 Reply
AmyC
Expert Alumni

1098-T information on federal return is showing as W-2 information of City of Lansing return

Any scholarship income not used for tuition, books, etc is considered taxable wage income. Scholarship income is a hybrid of earned income and unearned income.

  • Earned income  for purposes of the filing requirement - Single $12,950 
  • Earned income for the  dependent standard deduction is earned income + $400 
  • Unearned income for purposes of the kiddie tax and other 
  • See What is the Kiddie Tax?

If all of it was used on qualified expenses, you need to return to the student section and correct your entries. Chances are you received additional income for living expenses and that is taxable wage income to federal, state, and city.

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