Taxable scholarship income impacts your total income amount as it is included on Schedule 1, line 8r and then flows to Form 1040, line 8.

See IRS Publication 970 for details.

If the student is being claimed as a dependent, and their educational expenses exceed the scholarship, grant, or fellowship amount, the education credit or deduction would be claimed on the return of the person claiming the student as a dependent. If the student is not claimed as a dependent, they would claim these expenses. Conversely, if the scholarship or grant amount exceeds the educational expenses, and there is taxable scholarship income to report, the dependent/student would need to report this income on their return.

    Note. The TaxAct^® program prevents taxable scholarship income from being transferred to the return if the scholarship income belongs to a dependent.

For information on how to enter or review your scholarship, grant, or fellowship income in the TaxAct program, go to the Form 1098-T - Entering Scholarship Fellowship Income in Program FAQ.

On the screen titled Student Information - Summary of Scholarship Income, you will see the Taxable scholarship income amount and/or total Tax-free scholarships, grants, etc. amount.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.