If I claim my son as a dependent and paid all of his expenses for college, then does he have to claim the scholarship funds as income on his tax return?

[Marketstar · Accepted solution]

No, he only has to claim the difference or excess between his scholarship and his qualified educational expenses, if any.

However, you should report both scholarship and educational expenses to determine the difference

If the student’s earned income reported on a W-2, when added to the excess scholarships/grants does NOT exceed $6,300, then the student doesn’t even need to file a tax return, and nothing has to be reported.

To report qualified educational expenses and scholarship.

• Type in 1098-t in the search box, top right of your screen, then click the magnifying glass

• Click the jump to1098-t link in the search results

• Follow to prompts and online instructions

See Qualified Education Expenses