Q. Does my daughter need to file a tax return to report the room and board income?
A. No. As you surmised, the taxable amount (apparently around $7300) is under the $12,550 filing threshold.
Q. In 2022, she will have attended a full year of college, and the Room & Board amount will be triple (school is on the quarter system), so I think she will have to file then as it will be approximately $22,000 in taxable Room & Board, which is above the standard deduction amount?
A. That is correct.
Note: Scholarship income is a hybrid between earned and unearned income. It is earned income for purposes of the $12,550 filing requirement and the dependent standard deduction calculation (earned income + $350). It is not earned income for the kiddie tax and some other purposes. She will be subject to the kiddie tax in 2022, wherein a portion of the student's income is taxed at the parent's marginal tax rate.
