Why Does TT Require Form 8615?

[sgt-loudmouth]

I entered a $4800 research stipend in "Other Scholarships/Grants/Fellowships" via "Scholarships/Grants (for all schools)".  All of it was used for room and board and I entered it as such.

As soon as I did so, TT began requiring a Form 8615. But IRS Pub 501 clearly states, "Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any taxable scholarship or fellowship grant."

1. Why is TT requiring the 8615 for a taxable stipend?
2. Where else should I enter that $4800 so it will be treated as earned income for kiddie tax purposes?

[Hal_Al]

Actually TurboTax is doing it right. 

Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $14,600 filing requirement (2024) and the dependent standard deduction calculation (earned income + $450).  It is not earned income for the kiddie tax and other purposes (e.g. EIC).  For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions. Taxable scholarship goes on line 8r of Schedule 1

So, you get the full $14,600 standard deduction. But, once your total income exceeds $14,600 the scholarship is treated as unearned income.

Q. Where else should I enter that $4800 so it will be treated as earned income for kiddie tax purposes?

A. There is a workaround, but the correct place is as scholarship income. Entering earned income on line 1h of form 1040 is an IRS trigger. See:

https://ttlc.intuit.com/community/college-education/discussion/re-i-received-a-stipend-from-my-schoo...

Entering it as any other kind of "other income", it will not be treated as earned income and you may not get the full $14,600 standard deduction.