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Taxable Scholarships and fellowships are reported on line 7 of the students own tax return with "SCH" next to it, and is earned income, the same as wages, for the filing requirements.

Tuition and other educational credits cannot be claimed by a dependent, but they can be by the taxpayer claiming the dependent if they paid them and otherwise qualify.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**