<p>Any scholarships/grants in excess of tuition/fees/required books are taxable and have to be reported on a tax return as income. Looking at your numbers you may be required to do a tax return especially if you have any other income (you are certainly close to the income cut off but I can’t remember exactly what it is). You can still do a tax return even if you are claimed as a dependent by your parents. You would get a standardized deduction but not the personal exemption. IRS form 970 gives you the rules about what part of a scholarship is taxable.</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a>
pages 4-6</p>
<p>On FAFSA the taxable portion of scholarships/grants is included in your AGI from your tax return. You show the amount included on the worksheet so that it will be deducted from your AGI so as not to negatively affect your financial aid. ie the FAFSA formula will exclude the taxable scholarships when calculating your EFC.</p>
<p>You do not have to show the refunded amount seperately - it is the total scholarships/grants less tuition/fees/books that must be reported on taxes and FAFSA.</p>
<p>Rules for when a dependent must file a tax return are in IRS publication 929</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p929.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p929.pdf</a></p>