Hi, I need specific information regarding taxable scholarships. On son’s federal return, he has over $10k of taxable scholarship income and we had to use Form 8615 to pay the additional kiddie tax.
For California, it says we have to use the corresponding form 3800 if we’ve used fed form 8615. Then it goes on to say that scholarship income in California is only reported IF it kid gets a w-2 for that scholarship income.
Does anyone in California know what to do? Should I only list his California work income on his California tax form? If so, what do I put in the box that asks for federal adjust gross income because they will not match up?
Thanks in advance for any help you might be able to give me.
Just posting this as a follow up. California is still unclear about treating scholarship as investment income like the Feds. I was again told do not use form 3800 for taxable scholarships in California but I can see no way or form to reconcile with the federal forms where we have already used form 8615.
So if you used form 8615, then use form 3800 and then if the kid’s scholarship/grant is from an out of state school, use additional form called “Other State Tax Credit, California Schedule S” so you don’t have to pay full double tax on scholarship from another state. This form is if you had to pay tax in the state your kid goes to college. For example, my kid goes to school in NY, so he has to pay state tax there, and he worked this summer in California so he has to pay tax on his California earnings as well as the Federal Tax on his scholarships above the Qualified Educational Expenses-WHEW, lots of taxes!
If anyone does this differently for taxable scholarships in California, please post how you do it. Thanks!