Hal_Al
Level 15

Education

Q. Do I also have to include that extra income in Virginia's state tax return?

A.  No.  

TurboTax (TT) will automatically include the taxable scholarship in the AGI that transfers to the VA state return.  But, when you get to the allocation screens, you allocate the scholarship income as non VA source.  Despite the school being in VA, it is not  considered VA source income. It is done that way in most states.