<p>I think I finally understand the taxable/not taxable parts of my daughter's scholarship. Now the question is: if the the taxable part will result in no taxes once the standard deduction is taken, does she still have to file a return to report that income?</p>
<p>If the only income the student has is taxable scholarships under $5,700 (assuming the parents claim the student) then they do not need to file the Federal. Each state varies as to how that is treated. </p>
<p>If the student has other income, then you need to see whether the standard deduction is greater than the taxable income.</p>
<p>Thank you.</p>
<p>My understand is that if you are supporting more than half of your child’s expenses, then you are entitled to claim her as your dependent whether you actually claim it or not, then she can’t claim the exemption on her returns.</p>
<p>She can get the standard deduction ($5700) on her return even if she is claimed by someone else. She can’t get the personal exemption ($3650) of she can be claimed by someone else as a dependent (they can get the dependent exemption of $3650 instead).</p>