Taxable Scholarships, Filing Status and FAFSA

[4kidsdad]

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Is TAX_SCHOL considered earned or unearned income?

It depends which pub you read.

@2013 IRS Pub 501

Table 2.2013 Filing Requirements for Dependents</p>

<p>unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust. Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants.</p>

<p>Standard Deduction for Dependents</p>

<p>For purposes of the standard deduction, earned income also includes any part of a scholarship or fellowship grant that you must include in your gross income.

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@2013 IRS Pub 929

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<p>Tax for Certain Children Who Have Unearned Income</p>

<p>Unearned income defined. Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. It includes taxable interest, dividends, capital gains (including capital gain distributions), the taxable part of social security and pension payments, certain distributions from trusts, and unemployment compensation. Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages).

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@2013 IRS Instructions for Form 8615

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<p>Unearned Income</p>

<p>Unearned income includes taxable interest, ordinary dividends, capital gains (including capital gain distributions), rents, royalties, etc. It also includes taxable social security benefits, pension and annuity income, taxable scholarship and fellowship grants not reported on Form W-2, unemployment compensation, alimony, and income (other than earned income) received as the beneficiary of a trust.

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