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Question

Student claiming taxable scholarship

Forum|Forum|1 year ago
February 2, 2025
1 reply
0 views

I posted a previous question regarding my son who is a full time student that doesn’t work and has excess scholarship money he is supposed to file taxes for. He has in box 1 6xxx and in box 5. 9xxx. I was told to have him claim 7xxx on his taxes so I would be eligible for the credit. Inputting that he doesn’t owe any federal taxes because he’s under the taxable amount. However when it goes to state he will owe 140 dollars. Does that seem correct? Unfortunately I can’t find my previous thread and continue with the previous conversation.

Not A Product Question

Some states have lower tax filing thresholds than the federal, so it's possible that entering roughly $7,000 of income will generate a tax liability for the state even though he won't owe for the federal return. Can you let me know what state and I can confirm if that makes sense for that specific state?

It’s for New York

The New York standard deduction is $3,100 for dependents. Any income reported above this amount will be taxable to the state.

Even though he would have to pay some tax, you'd still get a bigger benefit on your federal return if you're able to claim the education credit.