Q. Am I supposed to file for my own or add to my dad's?
A. You definitely do NOT add your income to to your parent's return, even when you are their dependent.
If you do need to file a tax return, your parent can still claim you as a dependent. You just check the box, on your return, that says you can be claimed by someone else.
You say your scholarship for 2020 was $13,761. But, you don't say how much your qualified educational expenses (QEE) were. QEE is tuition, fees, books and other course materials including a required computer. The taxable portion of your scholarship is the net after QEE, not the full $13,761. That is, typically, only the portion used for room and board and other living expenses is taxable.
"I read that my W2 should be at least 1200 or 1500." That's not true.
You 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 (this may be the number you read about).
- Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12,400 if under age 18)
- Self employment income over $432, including money on a form 1099-NEC
Even if you had less, you are allowed to file to get back income tax withholding. You cannot get back social security or Medicare tax withholding.
In TurboTax, you indicate that somebody else can claim you as a dependent, at the personal information section.
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You said you never "submitted a 1098-T". That's probably because scholarship paid for everything. And that's normally correct. QEE paid by tax free scholarship is not eligible for a tuition credit. But, there is a tax “loop hole” available. The student reports some his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.
Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.
Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $5000 of taxable scholarship income, instead of $6000.
It is still possible for your father to claim this credit, on his 2019 and 2020 taxes, by filing amended returns,
This is not some sinister scheme. From the form 1040 instructions: “You may be able to increase an education credit if the student chooses to include all or part of a Pell grant or certain other scholarships or fellowships in income. For more information, see Pub. 970, the instructions for Form 1040, line 18c, and IRS.gov/EdCredit. Page 16 of PUB 970 (2019) actually has examples of how to do the “loop hole”.
