Q. Let's just say Box 1 is only $1,000 more than Box 5, would that mean we would have to add $3,000 to the student's taxable to add $4,000 to our return to get the credit?
A. Yes.
Q. The 2nd student has no income, so they're not required to do their taxes, because we would want to claim the credit, does that mean the student will have to do their taxes?
A. No. If the student has less than $13,850 ($12,950 last year) of taxable scholarship and/or work income, he is not required to file a tax return.
But, you may want to have him file to document the reporting of the income as taxable to allow the loop hole.
