I'll keep it simple as best I can, without going into details.
I did get a notice that our income is too high to receive any deductions,
So the student will report the 1098-T on the student's tax return, *if* they are required to file a return, or *if* they choose to file a return.
The student is required to file a return if any one of the following are true.
- The student's unearned income (not including scholarships, grants, 529 funds) is more than $350 more than their earned income up to $12,200. Example: the student has an investment that paid them $400 and a W-2 job where they made $2000. The student's standard deduction is their earned income (2000) plus $350. So the standard deduction for the student is $2,350. With $400 of investment (unearned) income they will pay taxes on the $50 above their standard deduction of $2,350. A tax return is required to filed.
- The student's self-employment income "profit" is more than $400. The student will pay self-employment tax of 15.6% on the self-employed "profit" income that exceeds $400. They are required to file a tax return.
With the below, the student is not required to file a tax return, but they might want to anyway.
- The student's W-2 job paid $2000 and that's the only earned income they have, with no other income (not including scholarships,grants, 529 distributions). The employer withheld taxes on that $2,000 of earned income, and the student want's that withheld money refunded to them. The student does not "have" to file a return. But if they don't, then the taxes withheld by the employer will not be refunded to the student.
As for the 1099-Q, the named beneficiary recipient of the 1099-Q is the one who reports it on their own tax return.
