topic My son is a junior in college and it says I don’t qualify for a student deduction because he acquired to much money in scholarships and it will count as income is that correct? in Education

My son is a junior in college and it says I don’t qualify for a student deduction because he acquired to much money in scholarships and it will count as income is that correct?

Thequeengee01 — Tue, 04 Feb 2020 16:44:06 GMT

It says my son will need to claim it as income?

Re: My son is a junior in college and it says I don’t qualify for a student deduction because he acquired to much money in scholarships and it will count as income is that correct?

Bsch4477 — Tue, 04 Feb 2020 17:01:06 GMT

It is true that if the scholarship amount is greater than the qualified education expenses the difference is income to the student. If the student has a filing requirement he should file his own return taking care to check the box saying he can be claimed by someone else.

Re: My son is a junior in college and it says I don’t qualify for a student deduction because he ...

HelenC12 — Tue, 04 Feb 2020 17:11:11 GMT

Yes, that is correct. Please read the information below.

If the scholarships/grants exceed the qualified education expenses, then:

your son will report the 1098-T and all other education expenses, scholarships/grants on his tax return.
he may have to pay taxes on the amount of scholarships/grants that are not used for qualified education expenses.
however, if your son's earned income, when added to the excess scholarships/grants does NOT exceed his standard deduction, then he doesn’t even need to file a tax return, and nothing has to be reported. See Do I need to file my own taxes if I'm a dependent?

Additional information: Are my scholarships, fellowships, or grants taxable? and Why is my scholarship taxable?

Re: My son is a junior in college and it says I don’t qualify for a student deduction because he ...

NCperson — Tue, 04 Feb 2020 17:44:04 GMT

on the 1098-T, if Box 1 exceeds Box 5, the form goes on the parent's tax return

if Box 5 exceeds Box 1, then form goes on the student's tax return.

The student will probably have a lower tax rate than that parent, so while there may be surprise that the scholarship (net of Box 1) is taxable income, there may still be little to no tax to be paid. depends on the numbers and whether the student had other income.

All is not lost here.