Why is this year different? I don't recall in the past, that Scholarships count as earned income. And my daughter will be taxed for it? Or did I just enter something incorrectly? I sure hope someone can please help me.
Alesia in TN
Below are the reasons that a scholarship would be taxable:
If the scholarship is used to pay for any of these, it counts as income and the amount paid is taxable:
If the student is getting a degree at an eligible school, the scholarship is tax-free when used for:
For example, if the scholarship was used to pay for tuition and room and board, you would be taxed on the room and board payment but not tuition.