1098-T issue

[ChrisMHonoluIu]

My income is approx $300k, son has a full academic scholarship at college which is approx $13k more than tuition - as it also covers room and board. I claim his as a dependent so assuming this amount i have to report as 'income.'  I entered under Deductions&credits in the form 1098T section.  But all it then says is "I cant claim because my income is too high."  But not trying to claim it as as any kind of deduction. My concern is this $13k isnt showing as a taxable income - which i believe it should be?  i think last yr i had similar issue so i manually entered this approx $13k under "misc Income as SCH.  Was this not correct???

[Bsch4477]

First determine if your son has a filing requirement. Scholarship income greater than education expenses is considered earned income to determine a filing requirement. . Once the student has a filing requirement based on that income (and assuming they don’t have unearned income from investments) only then is the scholarship amount considered unearned income. So if the scholarship income in excess of tuition and books is less than the $15,750 standard deduction he has no filing requirement and the scholarship differential can be ignored by both of you. In any case any amount that would be taxable (if he has to file because of other earnings or income) that amount would be taxed on their return not yours. If the amount is substantial Kiddie tax would apply so some of it would be taxed at your rate. But again, it’s on his return in that case, not yours.