Taxable scholarship -any new info?

Paying for College
1

I posted last year and this forum was so helpful. Hoping to confirm so info for 2019. My son has $3500 in taxable scholarships (used for R&B). We aren’t claiming educational credits. My understanding is:
• List the $3500 on line 1 of 1040 with SCH noted …
• Because this $3500 scholarship should be taxed at the earned income rate, not unearned income rate (much higher)

My question is on the standard deduction Last year, no issue b/c he had very little earned income and only one semester of the scholarship ($1750). This year, it’s a full year plus Son will have had close to $10,000 in earned income from jobs throughout 2019.

We will claim him as a dependent as we still provide over half of his support. Maximum deduction as a single dependent would be $12,200. Is this correct?

I’m thinking it will look like this:

$13,500 (earned income + scholarship) - $12.200 (standard deduction) = $1300 that we’d have to pay taxes on. At about the 10% rate, that’s $130 owed (minus whatever he had withheld from his jobs).

This sound correct or am I missing something? Thanks.

2

The net unearned income is taxes at trust rates.

Form 8615 instructions here:

https://www.irs.gov/forms-pubs/about-form-8615

3

Yes, according to the above, if the unearned income is less than $2,600, it seems that it will be taxed at 10%

4

For 2019, under the SECURE Act tax law changes, child’s unearned income can be taxed at the parent marginal rate rather than the trust tax rates.