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April 7, 2022
Question

SCHOLARSHIP INCOME

  • April 7, 2022
  • 1 reply
  • 0 views

My son received a little more than $25,000 in scholarship income above the cost of tuition.  TT is saying he owes about $8k in federal taxes. Is this because the bulk of this amount is tax at his parent's higher income tax bracket?

    1 reply

    Employee
    April 8, 2022

    Exactly. The amount of scholarship in excess of education expenses is subject to the Kiddie tax and taxed at his parents’ rate.