Thanks in advance for what is probably a stupid question.
I was doing taxes for my college kid who works part time on campus. (work study)
They are a WA resident but work and school is in Colorado.
Their income for last year was less than $5,000. School job did not take any federal withholdings. State took out like $10. Because no federal withholdings (which I am not sure why, the W4 suggests no exemptions) It is saying they owe taxes. (state is giving a tiny refund)
Based on just this, would they need to even file?
Now, here is the added item which is throwing me off.
Aside from scholarships and grants, I pay for their tuition. I have a 529 plan. They are listed as the beneficiary, but all withdrawals go straight to the school.
TT Deluxe's questions seem to indicate that since they are the beneficiary, they have to pay taxes on those withdrawals for qualifies expenses. Is that correct?
The difference is owing $159 vs $84.
Any suggestions? Corrections of my errors?
