My granddaughter is a fulltime college student being claimed as a dependent on her parents tax return. She had earned income in 2020 but was laid off and collected unemployment benefits exceeding the 10,200. exclusion amount. Per the Turbotax program she has to pay federal taxes on the excess unemployment at her parents tax rate because the unemployment is unearned income. Is that correct? Seems unfair to her. Any help or ideas would be appreciated.
