Q. Does this look correct?
A. Yes, you got it exactly right.
Q. They earned $2,400 over summer with an on campus job, they received a W2 for this job and that was their only income - so even with the $9,435 that's not enough for them to be required to file their taxes, correct?
A. Correct. That totals less than $14,600, so their standard deduction* will cover the total income. You may want to have them file anyway just to document the reporting of the scholarship as income.
For others reading this: even if his actual room & board had been less than $9,435, he could still claim that much as taxable scholarship to allow the parents to maximize the AOTC. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.
*Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $14,600 filing requirement (2024) and the dependent standard deduction calculation (earned income + $450). It is not earned income for the kiddie tax and other purposes (e.g. EIC). For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions. Taxable scholarship goes on line 8r of Schedule 1
