Unintended Consequences of GOP Tax Law

[brantly]

Scholarship in excess of QEE is considered earned income for the deduction even if it is taxed at the estate tax rate. “The Standard Deduction treats scholarships as ‘earned’ income. In other words, the student will get the $12,000 Standard Deduction, and only the income above that would be subject to Kiddie Tax.”

. You are partially correct. For the purpose of calculating the standard deduction, scholarship in excess of QEE is earned income. But that does not mean the dependent is entitled to $12k standard deduction. The SD for dependents is as I stated above. You can look it up.

The greater of:
$1,050
OR
The individual’s earned income for the year plus $350 (maxed at $12,000).