My daughter is my dependent and full-time college student. I claim her on my taxes. For 2021 she had $0 for 2021 and had $0 of unearned income. The 1099-Q shows earnings of $704 on basis of $4,295 for a $5k distribution to the college. When I enter the 1099-Q in TurboTax it calculates $70 federal tax due.
Why does a student with $0 income need to pay taxes of $70 on the earnings?
