eajcrawford,
Unfortunately, your student will still likely need to file a return and deal with Kiddie Tax. If the student has no other unearned income than the scholarship income, he or she may well not owe any tax because the standard deduction is earned income plus $300 up to $12,400. You do have the option of not claiming your student on your own return and letting him or her take the AOC if there is a possibility of shifting more of the scholarship into his or her income to free up qualified educational expenses. You would have to experiment to see whether as a family you come out ahead.
