Does my college student have to file a tax return for scholarship and pell grant used for non qualifying expense

andreialovescand — Sat, 01 Jun 2019 03:10:03 GMT

Yes, it is taxable income. But the standard filing thresh...

Hal_Al — Sat, 01 Jun 2019 03:10:06 GMT

Yes, it is taxable income. But the standard filing threshold still applies. That is, he/she doe not need to file at tax return if he has less than $6300* total income. ($12,000 in 2018)

He actually may want to report more of his grant as taxable. There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

*Full filing Requirements for dependents

1. Total income (wages, salaries, taxable scholarship etc.) of more than $6,300 (2016).

2. Unearned income (interest, dividends, capital gains) of more than $1050 (2016).

3. Unearned income over $350 and gross income of more than $1050

4. Household employee income (e.g. baby sitting, lawn mowing) over $2000 ($6300 if under age 18)

5. Other self employment income over $400, including box 7 of a 1099-MISC

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.

He doesn’t get his own $4050 exemption (deduction), when he files. In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

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califreeves — Sat, 01 Jun 2019 03:10:07 GMT

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califreeves — Sat, 01 Jun 2019 03:10:09 GMT

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xx-com — Sat, 01 Jun 2019 03:10:11 GMT

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topic ... in Education

Does my college student have to file a tax return for scholarship and pell grant used for non qualifying expense

Yes, it is taxable income. But the standard filing thresh...

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