Question

TT counting scholarship as income

Forum|Forum|6 years ago
February 16, 2020
1 reply
0 views

hi,

My daughter is 20 and claimed as my dependent.

She earned $13, 492 in 2019 working.

Her 2019 return is putting all $15k of scholarship as income.

IRS Worksheet 1-1 in Pub. 970 calculates $0 is taxable.

Is there something wrong or am I missing something?

K

KatrinaB48

If you use your scholarship to pay for any of these, it counts as income and the amount paid is taxable:

Room and board
Travel and incidental expenses
Any fees, books, and supplies or equipment that aren't required for your courses

If you're getting a degree at an eligible school, your scholarship is tax-free when used for:

Tuition and fees
Fees, books, supplies or equipment required for your courses
Any scholarship or fellowship for services received under the National Health Services Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance Program

For example, if you used your scholarship to pay for tuition and room and board, you would be taxed on the room and board payment but not on tuition.

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C

CPK4Author

Thanks Katrina. The money is tuition only. It's awarded directly by her college and reduces our bill.

How do i stop turbotax from counting it as income on line 1 of 1040?

D

DanaB27

There is a question that asks "Pay for Room and Board with a Scholarship or Grant?" when you answer "no" it should attribute all of the scholarships to tuition.

Log into TurboTax
Click "Federal" in the menu on the left side
Click on "Deductions &Credits"
Scroll down to "Expenses and Scholarships(Form 1098-T)" and click "Edit"
Click "edit" next to the student's name
Scroll down to "Scholarships/Grants (for all schools)" and click "edit"
Continue through the questions until "Pay for Room and Board with a Scholarship or Grant?" and answer "No"