KrisD15
Expert Alumni

Deductions & credits

Yes, possibly.

Only if the distribution was used completely for education expenses that are not needed for a credit, and also not needed to offset scholarship, would you not bother to report/enter it. 

 

Additionally, if having the student claim part of a distribution results in Unearned Income which then requires the student to file and perhaps also to the Kiddie tax, you might be better off allocating Scholarship income to the student. 

 

Scholarship income is considered Earned Income, which has a higher filing requirement. 

It can also be used by the student to contribute to an IRA.  

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