<p>After reading a bunch of threads about taxes & scholarships and trying to follow months of CC chatter and very informative posts (PLUS dredging through the Publication this and that on irs.gov), it would be interesting to hear from parents on here who might feel like sharing what to expect in terms of taxes on scholarships, especially NMF package +engineering or external $ – or at least what your personal experiences were with the taxes (who filed what and what kind of unexpected tax liability hits did you/they have to take).</p>
<p>Have any of you/your children ended up having to pay or will plan to pay estimated quarterly taxes is concerned? </p>
<p>I have printed a bunch of tax pubs to go over more detail but my eyes glaze over every time my hand starts to reach for them.</p>
<p>Thank you in advance for sharing any of your experiences with this. In laying out the costs of attendance and scholarship scenarios, it seems that the tax impact could be a rude surprise if not planned for early. </p>
<p>found these which summarize well and probably actually answer my question (wish I could delete my post!) – sorry if there were only more hours in the day to scour CC 
these were in a thread under “unused scholarship money”:</p>
<p>07-28-2014 at 6:49 pm by seccat
The child does put the taxable scholarship on their own tax form but they also fill out Form 8615 to figure the tax owed. The Title of the form has changed this year from Investment Income to Tax for Certain Children Who Have Unearned Income.</p>
<p>Throughout the instructions this year everything refers to unearned income vs. investment income. The definition of unearned income on page 1 clearly includes taxable scholarships/grants not reported on a W-2. This is a change from previous years.</p>
<p>If you look at the 8615, lines A-C come off the parents return, as well as lines 6-10 for determining the parent’s rate</p>
<p>07-28-2014 at 10:32 pm by paying4collegex4</p>
<p>Yup – big topic of conversation on CC during tax season this year was this tax form change. Some of the free online tax programs got it right at the beginning of the season and correctly used the parent rate per the revised IRS instructions and others didn’t calculate it correctly until they made changes very late in the tax season. This made a $2000 difference in taxes for each of my girls.</p>
<p>Yup. Cost almost 2K since was taxed at the parents’ tax rate. But this is only on the value OVER tuition, and “got” us mainly on the value of the housing scholarship.</p>
<p>I think you’re taxed on the amount that is beyond tuition, fees, and books.</p>
<p>Yes, that is correct.</p>
<p>Yes - It was a nightmare last year. We waited til the end to file since we were not anticipating that high of a tax bill for DS. Great that you are preparing now. I really disagree with the change to tax at the parents rate.</p>
<p>Do you know if the iPad is considered a ‘requirement’ – are there HC classes that they need to have it for, say to participate in class or complete assignments? Would its value be, then, non-taxable? Depending on the value assigned, it’s many Starbucks visits worth of taxes (hello recycled teabag), in addition to the housing. And I agree – if a student earns a merit scholarship, the student should be seen as also having earned the right to pay the taxes at his/her own rate…parents aren’t sheltering money/investments in a child’s name when a merit or athletic scholarship comes into play. Regardless, every little bit of help is fantastic! The tax portion will be less than the full year worth of housing, so no crying here (just headaches). </p>
<p>The iPad is NOT a requirement. UA does not require a laptop or iPad for any courses.</p>