Yes, scholarships that exceed qualified expenses is taxable income. But, no, you do not need to file a tax return, because the amount of reportable income is below the $12,000 filing threshold.
A dependent must file a tax return for 2018 if he
had any of the following:
1. Total income (wages,
salaries, taxable scholarship** etc.) of more than $12,000 ($6350 in 2017).
2. Unearned income** (interest,
dividends, capital gains) of more than $1050.
3. Unearned income over $350 and
gross income of more than $1050
4. Household employee income
(e.g. baby sitting, lawn mowing) over $2100 ($12.000 if under age 18)
5. Other self employment
income over $400, including box
7 of a 1099-MISC
Even if he had less, he is allowed to file if he
needs to get back income tax withholding. He cannot get back social security
or Medicare tax withholding.
** Scholarships are a special category of income. They are unearned income, for most purposes, including the kiddie tax. But for the purposes of the standard deduction, they are treated as earned income. So, with $4500 of scholarship income, you get a $4850 standard deduction and have 0 taxable income.
