topic When answering the questions I chose to tax scholarship money used for nonqualifying tuition at the parental rate. How do I change this answer? in Education

When answering the questions I chose to tax scholarship money used for nonqualifying tuition at the parental rate. How do I change this answer?

arlaverde — Mon, 30 Mar 2020 23:52:43 GMT

Re: When answering the questions I chose to tax scholarship money used for nonqualifying tuition ...

KrisD15 — Tue, 31 Mar 2020 00:11:51 GMT

Scholarship income is taxed as earned income, so that question should not have come up.

You can see if form 8615 was generated and delete it if it was:

Sign into your account and go into the return

Open the “Tax Tools” drop-down on the left side bar

Click on “Tools” on that drop-down

Click Delete a form (the third one down) on the “Tools Center” screen

Scroll down and click “Delete” next to Form 8615

Re: When answering the questions I chose to tax scholarship money used for nonqualifying tuition ...

Hal_Al — Tue, 31 Mar 2020 19:33:42 GMT

"Scholarship income is taxed as earned income" is not quite correct. For purposes of the "kiddie tax" (form 8615) , it is unearned income. So, you will get the choice of trust rates or parental rates. But, for purposes of calculating the standard deduction, scholarship income IS treated as earned income. The effect being that scholarship income is not taxed unless you have over $12,200 of earned income/scholarship.