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Level 2
Apr 7, 2022 11:12 PM UTC
Question

SCHOLARSHIP INCOME

My son received a little more than $25,000 in scholarship income above the cost of tuition.  TT is saying he owes about $8k in federal taxes. Is this because the bulk of this amount is tax at his parent's higher income tax bracket?

    1 reply

    Level 15
    Apr 8, 2022 12:31 AM UTC

    Exactly. The amount of scholarship in excess of education expenses is subject to the Kiddie tax and taxed at his parents’ rate.