Question

Dependant Student Child with Scholarship.

Forum|Forum|6 years ago
January 31, 2020
1 reply
0 views

My 20yo son is a Full Time student with a 50% scholarship. Part of the remainder 50% is paid with the Florida pre-paid tuition program and used for his out of state tuition. Grandma then pays the remainder of the 50% and we pay for the books. He is also employed part time. He earned less than 3k in income on W-2. I will claim him as a dependent, but who is required to (should) claim the scholarship and who gets credit for the remainder of the paid tuition? I will also file a tax form with him to get him his refund. What are the rules or where do I look for IRS documentation on this?

TurboTax Home & Biz Windows

J

JotikaT2

It depends.

You as the parent will report the 1098-T tuition on your tax return and enter any applicable scholarships as part of your entries into the program. (Grandma will not be able to claim the credit as the student is not her dependent for tax purposes.)

Go to the Federal section.
Click on Deductions & Credits
Select the Education tab
Select Tuition and proceed to answer the questions.

Scholarships are taxable if used for the following items:

Room & board
Travel & incidental expenses
Any fees, books & supplies not required for classes

Scholarships are not taxable if used at an eligible school for a degree if used for:

Tuition & fees
Fees, books, supplies needed for classes
Scholarship or fellowship for services from:
National Health Services Corps Scholarship Program
Armed Forces Health Professions Scholarship & Financial Assistance program

Help for when scholarships are taxable vs. not taxable

The excess of the scholarship income over the actual allowed education expenses would be reported on your son's return as scholarship income.

However, he would need to meet the filing requirements threshold to determine if he even needs to file a return. Please make sure he marks that he can be claimed as a dependent on someone else's return.

Please see the following to help you determine if he needs to file a tax return.

Gross income amount for dependents

I have also attached a link to the IRS with additional information on education credits for your reference.

IRS Education credit Q&A

Education credits faqs

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"