I've seen several questions about 1098-Ts in this forum. I believe I understand but would like clarification on some things. I also have a couple of question on state taxes. Here is my son's situation:
We live in Indiana, but he goes to college in Ohio on a full ride athletic scholarship. He received a 1098-T for approximately $37.5K (box 5) with payments received for tuition, etc. (box 1) of $14.5K. He also made $1K in a summer job in Ohio. No federal taxes were taken out, and $6 in state (Ohio) taxes taken out for his job.
I am doing his taxes, and I made a separate Federal tax return under his name and entered both his 1098-T as well as his $1K from his job. I checked "someone can claim you as a dependent" on his form. I am claiming him as a dependent on my federal form, and I did NOT put any information from his 1098-T on my federal taxes. I believe it is OK to do this way?? Please advise if it isn't.
Now my question on state taxes. As I understand it, he is still a resident of Indiana even though he goes to school in Ohio. So I believe I would file an Indiana tax return for him as there is reciprocal clauses between Indiana and Ohio regarding state taxes.
Here are my questions:
1) Indiana's "rule of thumb" for filing state taxes is $1000. So I don't know if I even need to file Indiana tax return for him??.....OR
2) I had already entered his `1098-T and his $1000 in wages into Turbotax. When I went to the turbotax tab for state taxes, it gave me a "Indiana Tax Due" number of $900! So it is obviously counting the $23K that's taxable from the 1098-T. Is this correct? He has to pay state tax on the 1098-T as well? And if so, does he pay it to Indiana or Ohio?? And does Turbotax software handle this calculation and I just have to print out the forms from the proper state and send them in?
Thanks for the help.
