Solved: 1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?
cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

please help us figure this out.  We'd like to have our son claim the extra $2000 in scholarships that exceeded tuition/fees because obviously his tax rate is lower. Can we do this? (I've heard that kids pay this at their parents tax rate; hoping to avoid that!)

Student: income 7000$ Age 20; dependent. he's filing taxes and will receive a small amount back.

scholarship amount exceeding tuition/fees: $2000.

Books for two semesters: $700 that arent on 1098t

please clear up how this all works! who pays the taxes on this amount? where do we put it on his tax form? or on our tax form? very appreciated!

1 Best answer

Accepted Solutions
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

The income is always listed on the child's tax return. However, it is also correct that the tax may be calculated at your rate on the child's return (via Form 8615, aka "Kiddie Tax")

In order for this dreaded Kiddie Tax to be an issue, the unearned income (which would include taxable scholarships) has to exceed $2100.


You simply enter the taxable amount in the education section as a scholarship (on his return). You don't need to enter the 1098-T and go through all the steps. You can if you want, but the only output that matters is that the taxable amount ends up on line 7 of the 1040. All the input with his 1098-T, books, etc.. is unnecessary work just to get a single figure on to his tax return.

View solution in original post

13 Replies
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

The income is always listed on the child's tax return. However, it is also correct that the tax may be calculated at your rate on the child's return (via Form 8615, aka "Kiddie Tax")

In order for this dreaded Kiddie Tax to be an issue, the unearned income (which would include taxable scholarships) has to exceed $2100.


You simply enter the taxable amount in the education section as a scholarship (on his return). You don't need to enter the 1098-T and go through all the steps. You can if you want, but the only output that matters is that the taxable amount ends up on line 7 of the 1040. All the input with his 1098-T, books, etc.. is unnecessary work just to get a single figure on to his tax return.

View solution in original post

Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

thanks. we will add it to his 1040ez form, looks like we can just add it on another line in turbo tax; amount is actually 1935$.

OK, next question - on parents taxes we can still claim the $700 in books that we paid for AOTC, right? we qualify with our income to claim it. Will we also need to report the scholarship overage and the book costs will come off that?  or just claim the book costs?  thanks christina, you are really helping people!
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

You're welcome. That's a little iffy and can depend on the terms of the scholarship. Its not necessarily cut and dry or a response that I can make quickly. In general, the scholarship applies to education expenses before it can be moved as taxable income. I hate to say it, but that's a brand new question that deserves its own post. In fact, I haven't seen that posted recently and I think it would be very helpful to the Answer Exchange community. Something like "Can I claim books on my return and shift some of the scholarship income to my child's return".
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

thanks - the scholarship went to a short trip abroad and certainly didnt cover any books for regular classes during the year. so we'd still like to take that credit; have receipts for books.  I'll post another question.
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

Thank you! I really do think that'll be a good question...
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

SO confused. here is a another thread which says parents declare scholarship winnings on their tax forms.

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2732554">https://ttlc.intuit.com/questions/2732554</a>

thoughts on this? does dependent kid claim these scholarships or do parents ?? any ideas are helpful
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

Always kids. Never parents. A scholarship cannot be income of a parent. The thread is a little long, but the gist of the discussion was about claiming the child as a dependent. The user answering the question was not really addressing the issue of the scholarship income so much as who claims the child as a dependent to begin with (or whether the child claims him/herself)
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

There are no circumstances when a parent claims scholarship income.
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

ok, thanks again! big learning curve here.
Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

No problem.. I did think the other thread was confusing the original question.
Highlighted
Level 9

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

@TurboTaxChristinaS  just to confirm why is excess scholarship not considered unearned income that can be filed on parents returns?  Thanks. You pointed out that it was unearned income so wouldn't it then have to be reported if over $2,100 on a return?   Also what if the excess is not scholarships but excess 529 distributions is it unearned income then and does it follow same rules?
Highlighted
Level 2

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

If you aren't providing support, why claim as dependent?   If scholarships, earned and unearned income provide 100% support except for maybe health insurance....

Highlighted
New Member

1098 -T scholarships exceed tuition/fees. Student made over $6000 during year working. Who pays taxes on this extra scholarship amount?

much obliged - the grant went to a short outing abroad and unquestionably didnt spread any books for customary classes during the year. so we'd in any case prefer to assume that praise; have receipts for books. I'll post inquiry.

 

v
Privacy Settings