the support test for a qualifying child is the same support test so a child who provides over 50% of their own support refers back to the qualifying relative calculation support test that does include certain scholarships as income for support test and at same time. It says at the same time scholarships are not included then says certain ones may be.
The IRS has included fellowship and grants and certain scholarships as earned income for the EITC and for AOTC and for self employment income. In same publication it says a scholarship is not support but then says it is in certain circumstances. In general a scholarship is not earned income....
We can agree to disagree but, I know that conversations with certain major company tax preparers are including it as earned income for support tests for dependent to meet greater than 50% support and I also know factually it has satisfied the IRS. High wealth individuals lose exemptions so it is better for student to claim themself. They support it with scholarship declared as earned income, then take AOTC or other tax credits and reduce the kiddie tax for unearned income, and the earned income tax to deminimis amounts although parents tax rates are at caps, the entire effort is to reduce the kiddie taxes to the lower tax rate of the student.
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