Is a scholarship taxable when used it to pay for required books?When I was filling out the form it saids that my son's scholarship is taxable.Would this affect my refund?

[MichaelL1 · Accepted solution]

A scholarship is not taxable when paying for books, however, it is taxable when the scholarship money exceeds the educational costs.  

If a student has taxable scholarship income it needs to be on the student's return.

A student also while being your dependent, would not get the personal exemption of $4,050 (as you are getting it) however they would get the standard deduction of $6,350 so only income over this would be taxed.

If this is less than that amount and the other income they may have is less than $6,350 they may not need to file.

Due to the taxable income from the scholarships, you would then not report the 1098T on your return.