If your college student did not use all of their scholarship and grant money this year but is planning on using it all next year do you have to claim this on taxes?

[imbeargummi]

Does my college student have to file a tax return to claim money not yet used( roughly $5000) from scholarships and pell grants recieved this year? She is planning on attending a four year school next year that is more expensive and is saving to pay for next year, all of this money will be spent on school next year does it still need to be claimed as income recieved this year?

[MarilynG · Accepted solution]

If she received a 1098-T showing Scholarship amount in Box 5 as greater than Tuition amount in Box 1 or Box 2, this overage would be taxed as 'Other Miscellaneous Income' amount on her return.

If you don't claim her as a Dependent, and her earned income was less than the Filing Requirement of $6,350, however, she would not be required to file a return and report the 1098-T.

[krgoodwin]

Did the scholarship/grant entities send the college student an income statement? (1099 something or other)  If so then it was reported to the IRS and I would contend it has to be reported by the college student to match up with what the IRS already knows.  The one check the IRS computer does quite easily is match up the reports sent to IRS with a recipient’s tax return.  If they can’t find a match, it automatically generates a letter to the recipient.