Student income

Forum|Forum|4 months ago
March 4, 2026
2 replies
17 views

My daughter's income is less than $500. But she received a 1098T form showing $80,000 as scholarships/grants, which is $15,000 more than the school received as payments.

Does this count as "earned income" for the question "Did you provide over half of your own support with earned income during 2025?" She did use her 529 savings but we didn't provide her any financial help.

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DaveF1006

Level 15

No, this doesn't count as earned income for the question "Did you provide over half of your own support with earned income during 2025? You can answer this question "yes" as a result.

This is mentioned in Publication 501, which mentions "A scholarship received by a child who is a student isn't taken into account in determining whether the child provided more than half of his or her own support". This is mentioned in the Qualifying Child section under a subheading titled Support Test.

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Hal_Al

Level 15

Q. Does this count as "earned income" for the question "Did you provide over half of your own support with earned income during 2025?"

A. No.

Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $15,750 filing requirement (2025) and the dependent standard deduction calculation (earned income + $450). It is not earned income for purposes of the support question, 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, from which TT treats it as hybrid income.

If part of the reason, you are asking that question is to see if you can claim her as a dependent:

As @DaveF1006 said, Scholarships are ignored in the support calculation.

In addition, if you are the owner of the 529 plan, the money that was withdrawn is considered as support provided by you, not her, in the support calculation.