If your student has taxable scholarship, you do not report it on your tax return, even if he is your dependent.
He enters it on his own tax return. If taxable scholarship is his only income, and the amount is less than $12,950, he does need to file a tax return. Scholarships that paid for non qualified expenses are taxable. Tuition, fees, books and computers are qualified expenses. If box 5 of his 1098-T is more than box 1, TurboTax will automatically treat the difference as taxable scholarship income unless he tells it differently.
You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she 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
Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.
In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.
