But if the student needs it to be $12k because of a large taxable grant/scholarship, it will be.
If the student has $3k in regular earned income and $6k in taxable scholarship, yes, the standard deduction will only be $9, 350. If that’s all the income the student has, the tax owed will be $0; $9k in taxable income, standard deduction of $9350, tax figured on -$350, or $0 tax owed. If the student has other unearned income, ( from interest?), then some tax may be owed on that unearned income at the now higher estates and trusts rate if it isn’t covered by that extra $350 on the standard deduction.
That won’t change if the law is repealed or adjusted. Non-scholarship unearned income is still unearned income and taxed as such.
Where this could help is if the student had in excess of $12k in regular income and non-QEE. If the student had $10k in income and $15k in scholarship unearned income, the student would then have $25k in income, less $12k standard deduction, and then pay taxes on the remaining $13k at the student’s regular rate (10%, 12%, whatever).
I hope it is fixed. I don’t think students should have to pay taxes on scholarships, but I really don’t think they should be under the kiddie tax. That is really unfair since I’m not in the 24% tax bracket and neither is my daughter. She ‘earned’ her scholarships and her earned income rate should be used.