Our daughter is a full-time college freshman with $0 in earned income, but she received a scholarship and a grant. Is she required to file a tax return?

[MinhT1 · Accepted solution]

It depends.

If her scholarship in excess of tuition is more than $14,600, she'll need to file a tax return. 

[Hal_Al]

It depends on the amount of the scholarship and what other income she has,  from what sources. 

Scholarships that pay for qualified educational expenses (QEE - tuition, fees, books and other course materials) is tax free.  Scholarship amounts that exceed QEE is taxable income, on the student’s tax return. Room & board are not QEE.

If box 5 of the 1098-T exceeds box 1, TurboTax (TT) will treat the difference as taxable income, unless you enter additional QEE at books and other expenses.

You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2024 if he had any of the following:

1. Total income (wages, salaries, taxable scholarship etc.) of more than $14,600.
2.  Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1300. 
3. Unearned income over $450 and gross income of more than $1300.
4.  Household employee income (e.g. baby sitting, lawn mowing) over $2600 ($14,600 if under age 18)
5.  Other self employment income over $432, including money on a form 1099-NEC