Q. Its takes her State tax return from a small refund, to owing $81. Does that seem correct?
A. Yes, that's possible. You're apparently in a state with a low filing threshold. Most states don't tax a student with only $5807 of earned income.
We could look at making the 1099-Q taxable, instead of the scholarship. That would have her owing about $45 federal, but should lower the state. So, I suspect it's only about breakeven. But, entering the info into TT gets much harder.
