<p>My daughter is a dependent on my tax return but she earned $1900.00 in 2012 and received a 1098-T with $21,000.00 in grant and scholarship money. Does she need to file a tax return and,if so, where does she put the scholarship/grant money? What is her adjusted gross income? I am trying to fill out the fafsa for next year and cannot figure out what to do. Thanks</p>
<p>Scholarships that are not used to pay for qualified education expenses are taxable to the student. Qualified education expenses for this purpose are tuition and fees and required books. So any scholarships used to pay for those are not taxable. Any used to pay for any unqualified expenses, such as room and board, are taxable. Whether she will need to file will depend on what her total income (earnings plus taxable scholarships plus any other income) are. The Standard deduction for a single person is $5950 for 2012, so if her total income is less than that she should not have to file (unless she has unearned income over a certain amount, or income that generates self employment taxes).</p>
<p>thanks so much. All the scholarship and grant money was used for tuition and fees so I don’t think she needs to file BUT what do I put on the FAFSA form under her adjusted gross income? Does she have an agi if she didn’t file taxes? Thanks so much for your time!</p>
<p>If she does not file, she does not have an AGI. You should earn her earnings from work in the appropriate box though. (it won’t impact her EFC as it is less than the protected income amount, but it should be reported anyway).</p>
<p>This is a good place for more detailed explanations to the questions.</p>
<p><a href=“http://studentaid.ed.gov/sites/default/files/2013-14-completing-fafsa.pdf[/url]”>http://studentaid.ed.gov/sites/default/files/2013-14-completing-fafsa.pdf</a></p>
<p>Please keep in mind that if she had taxes withheld, she would want to file to get those back. Also, the State might have a lower threshhold and might require her to file.</p>