NIH postbac 1098-G

[skblommer]

My son has started as a NIH postbac starting to do research later in 2019.  For filing taxes do I still list him as a full time student and a dependent for our taxes?  For his taxes is he considered a MN or MD resident?  They said he had to get a MD driver license within 60 days so he did.  So is he still a MN resident or did that change when he got his MD driver license? 

[KrisD15 · Accepted solution]

If he is still a student, or was a student for "at least part  of at  least  5 months" in 2019, he could be your dependent. 

If he is your  dependent, he is a resident of the state in which YOU live. (Does not matter about Driver's License.) 

If he is not your dependent, he will file and claim himself on the Federal Return and most probably claim Part-Year Maryland residency. 

[oaklander]

Also Turbo tax does not properly treat the NIH Post Bac 1098-G taxable grant.  The way Turbo tax software treats it if you follow their questionnaire, it shows up under unearned income, and misc income.  The only way to have it property show up in 1040 line 1, and not unearned income (which triggers filing of an 8615 form and a punitive tax for the dependent), is to follow the Turbo Tax cpa advice to report this on a 1098T.  Basically make NIH the school, fill in no educational expenses, and a scholarship of the amount of earnings.  You may have to recheck in the actual form that it gets entered correctly there.  The first time I entered in the questionnaire, but it did not show up in the 1098T form as scholarship.  This makes the amount show up property in 1040 line 1, (Amount - Sch) as per IRS Publication 970 page 6, and IRS, and makes it not show up as unearned income, as per IRS Publication 929 pages 14, 17, 18, since it is not.  I sure hope Turbo Tax fixes this before next year, and PS the regular folks at Turbo Tax just tell you the software is correct, when it isn't....I heard on one posting someone actually paid this tax, which can be substantial if your child is a dependent.....