Why are my Ohio state taxes requesting scholarship information when the scholarship was provided by another state?

[julie00913537]

I am an Ohio resident, and I attend a school out-of-state. While filing my state taxes, it is asking for my scholarship information provided by a school in Iowa. Why is it asking for this financial information that never touched the state of Ohio?

[MaryK4]

As an Ohio resident, you must report all income regardless of where it was earned.  In most cases, if you paid tax on the income to the state where it was earned, you can claim a credit for the taxes paid to other state so you are not taxed twice on the same income at the state level.

[Hal_Al]

Confirming the other reply, as an Ohio resident, you must report all your income no matter where it was earned.

On the other hand, when you are an out-of-state student, any taxable scholarship is not taxable by the state where the school is located. It is not considered income "sourced" in that state. 

Q. Why is it asking for this financial information (scholarship) that never touched the state of Ohio?

A.  Scholarships that exceed qualified educational expenses are taxable on the federal return. Room and board (R&B) are not qualified expenses on the federal return.  But, Ohio does not tax Pell Grants used for R&B. So, the program is most likely asking this question to give you a deduction (technically, an adjustment to income) on the Ohio return. 

Page 24 of the Ohio instructions:

Line 37 – Portion of Certain College Grants Used to Pay Room and Board
Deduct any portion of a federal Pell grant and/or Ohio College Opportunity Grant included in your federal adjusted gross income that was:
●Received by you, your spouse or your dependent; AND
●Used to pay qualifying room and board expenses. Qualifying room and board expenses include only those amounts paid for room and board, including meal plans, furnished by the educational institution.