Scholarship

Q. Can I file tax return including her as a dependent and claim her college expense $9,200?

A. Yes

Q. Can  she file her own  tax return for her income report her scholarship?

A.  Maybe.

None of her scholarship is taxable  and it does not need to be reported on her tax return.   You will use $4000 of her $9200 tuition to claim The American Opportunity Credit (AOC).  This means she still has $5200 of qualified expenses.  Since that is more than her $3200 scholarship, none of the scholarship is taxable and is not reported.

$1500* of wages is less than the $12,400 filing requirement, so she is not required to file a tax return. 

But, she is allowed to file if she needs to get back income tax withholding (box 2 of the W-2). She cannot get back social security or Medicare tax withholding.

* This assumes her $1500 was reported on a W-2, not a 1099-NEC.

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You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2020 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,400 (2020).
2.          Unearned income (interest, dividends, capital gains, unemployment) of more than $1100.
3.          Unearned income over $350 and gross income of more than $1100
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12,400 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

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.

In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.