I am a full-time college student that is a dependent under my parents. I do not work a job nor have any earned income (so no W-2s, etc.). However, with the 1098-T form that I received from school, Box 5 (scholarships & grants) exceeded Box 1 (qualified tuition & related expenses paid) by about $5000, which would be considered the excess scholarship taxable income. I already included my 1098-T information on TurboTax under the "Education" section of Deduction & credits but it is not giving me additional tax forms to report the excess scholarship. So, is there a tax form needed to be filled out for the excess scholarship income, and should it be claimed on my parent's return since I am a dependent? Also, would not this excess scholarship income be tax-free because I meet the threshold that if a person earns less than $12,550, I do not have to file a tax return? Please let me know, thank you.
You do need to report scholarship income to the extent it exceeds your qualified education expenses. You can research what are qualified education expenses in the IRS Pubilcation 970 on education benefits. Any income is reported by you and not your parents. There is a chance that you will have to pay tax at your parents' tax rate.
You should not enter the education expenses on your return.
Your parents will receive any education benefits on their return.