A student-dependent must file a tax return for 2022 if he had any of the following:
- Total income (wages, salaries, taxable scholarship etc.) of more than $12,950 (2022).
- Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1150 (2022)
- Unearned income over $400 (2022) and gross income of more than $1150 (2022)
- Household employee income (e.g. baby sitting, lawn mowing) over $2300 ($12,950 if under age 18)
- Other self employment income over $432, including money on a form 1099-NEC
If she declares the $3834 of scholarship as income, the taxable portion of the 1099-Q is reduced to $204.* That's less than $400 (#3 above). Technically, she does not need to file a tax return, unless she needs to get a refund of withholding from her W-2. The $204 is covered by the extra $400 standard deduction (earned income + $400), so there is no tax.
You may want to file just to document the reporting of the income.
*$16805 QEE - 4000 (used for AOC) = $12,805 available for 1099-Q.
12805 / 13300 = 96.28% of earnings are tax free
0.0372 x 5472 = $204 taxable income
