Another kiddie tax question, kind of

SoWest
Thu, 23 Mar 2017 05:21:36 +0000

DS is a junior with a generous scholarship that covers full COA. We get a 1098-T and have to figure the kiddie tax for the portion that exceeds tuition, books, and fees. Imagine my surprise when I found out that his paid internship last summer is listed as “Grants and Scholarships” this year on his 1098 instead of being on a W2. When I asked DS if taxes were taken out of his pay last summer, he had no clue. Sigh. He’s calling school financial services tomorrow to find out. Would you ask to have the internship taken off the 1098 and put on a 1099 so that it’s not subject to kiddie tax? Or is there another way to handle this? TIA. This is a new one for us.