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Isaiah Mars
Level 2

Dependent College Student

If I am a college student, and file as a dependent under my mother, would I need to file taxes on the money I get back from unused scholarships? What would that process be like?

3 Replies
Hal_Al
Level 15

Dependent College Student

Q. Would I need to file taxes on the money I get back from unused scholarships?

A. Simple answer: yes. But maybe not.

 

Scholarships used for qualified expenses (tuition, fees and course materials) is tax free and does not need to reported on a tax return.  Scholarship money used for room and board and other living expenses is taxable income.  Generally, if that amount is less than $12,400, you do not need to file a tax return.

 

But the $12,400 also includes any other income you may have. More specifically, a dependent  must file a tax return for 2020 if he had any of the following:

  1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,400 (2020).
  2.          Unearned income (interest, dividends, capital gains) of more than $1100.
  3.          Unearned income over $350 and gross income of more than $1100
  4.          Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12.400 if under age 18)
  5.          Other self employment income over $432, including money on a form 1099-NEC

 

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

Isaiah Mars
Level 2

Dependent College Student

Thank you for your response, I also have another question. If the money you receive back is from FAFSA do the same rules apply?

Hal_Al
Level 15

Dependent College Student

Simple answer yes.  The answer is the same regardless of the organization giving the scholarship.

 

But "FAFSA"  is only a form  (Free Application for Federal Student Aid ).

 

Student aid comes in two basic types: loans and grants (scholarships).  If your federal aid is grants/scholarships, the answer is the same.  If you have federal loans, none of it is taxable.  That's your money.  It wasn't given to you, you only borrowed it. 

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