If I got a student refund during the pandemic from my financial aid and used it to invest in the stock market then lose it all, would I need to file taxes? If so how?

[metuan]

I currently live in California and got a refund from my university for cal grant and pel grant. I used the financial aid to buy options and stocks but failed when the stock market took a dip early August.

[Critter-3]

Yes you need to file ... the grants not used for qualified education expenses is considered taxable income and then you have the stock trades to report ... the broker will send you a consolidated 1099 form in February. 

[rjs]

The losses on the stock and options will offset some or all of the taxable grant income, so you might not have to pay any tax, but you still have to file the tax return. You might even end up with a capital loss carryover that can be used to reduce your taxable income next year.

"If so how?"
I'm not sure what you are asking. The university will send you a Form 1098-T, and you will have the consolidated 1099 statement from the broker. You enter the information from those forms into TurboTax, and TurboTax will guide you through the filing process. You have to file a California state tax return in addition to the federal tax return.

If you use TurboTax Online you have to use Premier (or higher) to handle the investment transactions. If you use the CD/Download TurboTax software you should also use Premier (or higher) to make sure the investment transactions are handled properly.

[Critter-3]

If you qualify  AND   if you wait until mid January  THEN you can use one of  the IRS FREE FILE options to file a fed & state return for free ... but you must be patient.    https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

IRS Free File: Closed until January 2021

IRS Free File is closed for the 2020 tax season. Check back in January for Filing Season 2021 opening details.

For Filing Season 2021, you must make $72,000 or below to use IRS Free File partner offers.

[Hal_Al]

 "I bought options and stocks but failed when the stock market took a dip early August".

You have not realized a capital loss on stocks until you sell the stock or it becomes totally worthless (unlikely in the same year you bought it).  Unexercised options are considered as sold on the expiration date.