Hal_Al
Level 15

Education

There's nothing new.

 

Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $12,950 filing requirement and the dependent standard deduction calculation (earned income + $400).  It is not earned income for the kiddie tax and other purposes (EIC. IRA contributions).  So, technically it's still subject to the kiddie tax, but because of the increased standard deduction, most students don't actually pay any tax

 

But if your student's total income is more than $14,100 (12,950 + 1150) then they will be subject to the kiddie tax and form 8615 is required.