1099 Misc and Scholarship

[broncos4ever]

My child received a 1099 Misc form for a $2500 scholarship that could be used for anything by my company.  I reported it to the university and it is included on the 1098 T form.  About $1300 of the scholarship is considered taxble because it exceeded the qualified expenses by that amount.  My child also has a W2 and earned about $1,200 for the year.  How do I handle this without being double taxed for the $1300?  

[AmyC]

Since the scholarship income exceeds the cost of room and board plus tuition and related expenses, it becomes income to your child. Add the $1300 to your child's wages and it is less than the amount required to file. Your child can file a return to claim any tax withheld, otherwise, no need to file a return.

It is also considered unearned income for the kiddie tax, you are below the limits for filing that income on your return.

You are not being taxed on the $1300 at all unless you have some other circumstances not disclosed.

References:

• A quick quiz, Filing requirement  to double check filing requirements
• A quick quiz, Scholarship, fellowship or education grant - Do I include it as income on my tax return?
• Article What is the Kiddie Tax?

[broncos4ever]

So do I put it as a line item on the 1099 Misc section or do I just adjust it to $1300?  It is over the qualified expense but all of the scholarship paid for room and board (which I thought was taxable).

[KrisD15]

To clarify, it isn't clear to me what you mean by "It is included on the 1098-T". Do you mean it was included on the 1098-T Box 1, payments received, or 1098-T box 5 scholarships? 

Scholarships are not normally reported on a 1099-MISC.

If the money "could be used for anything" it sounds more like "Other income", not Scholarship income".