If you had out of pocket expenses and qualify for an education credit, you could add the 1098-T on your return. Otherwise, the amount of scholarship may be taxable to the student or added to your return.
Let's start with:
What You Need to Know about AOTC and LLC See if you qualify to claim the credit based on your income and determine if you have close to $4,000 or enough to make it worth claiming this year, in out of pocket expenses.
- If yes, then claim the credit. The entire scholarship amount will be income.
- If no, you can reduce the taxable amount by expenses paid out of pocket.
For his scholarship income - a hybrid income determined if taxes need to be filed and also a passive income that can be included for the Kiddie Tax.
Take the quick quiz, Filing requirement - Do I need to file a tax return?