Q. Is this all correct? Does she have to claim a portion of the grant on her return?
A. Simple answer: Yes. With multiple tax issues involved (tuition credit, scholarship, 529 distribution) it is not unusual for the student to have some taxable income emerge. Taxable scholarship (as opposed to some of the 529 distribution being taxable) is usually the best alimentative.
TurboTax is capable of handling this complex calculation. But, it does require careful attention in entering the data.
If her total income is only $2150 (2000 + 150), she does need to file, as that is under the filing threshold (generally $12,400).
You do not mention whether you are claiming the tuition credit. You should be
