Q. We are reporting it on our return. So our daughter does not have to report it on her return too, is that correct?
A. It depends on what "it" is.
The 1098-T goes on your return, if you are claiming a tuition credit. It can also go on her return if she needs to report scholarship income. So, yes, it can go on both returns*.
You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2020 if he had any of the following:
- Total income (wages, salaries, taxable scholarship etc.) of more than $12,400 (2020).
- Unearned income (interest, dividends, capital gains, unemployment) of more than $1100.
- Unearned income over $350 and gross income of more than $1100
- Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12,400 if under age 18)
- Other self employment income over $432, including money on a form 1099-NEC
Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.
In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.
*Technically the 1098-T does not get reported on anybody's return.
The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly your student has taxable scholarship income. You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T.
If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)
