Full-Time College Student Requirements to File a Federal Tax Return
- Some college students work on campus, while others have jobs with off-campus employers. One common type of job is work-study employment, which is a form of financial aid funded by the federal government. The IRS considers all of these to be compensation for services and therefore your wages are taxable. Whether or not you must file a tax return depends mainly on how much you earn and your filing status.
- Full-time college students may be claimed as dependents by their parents (or in some cases another relative) until they are 24. A dependent does not have to file a federal tax return if her unearned income is less than $950 and her earned income is less than $5,700. These income limits are for 2011 and may vary. See IRS Publication 17 for up-to-date figures. Publication 17 is available on the IRS website (see Resources).
- Full-time college students who are not claimed as dependents may earn up to $9,350 if single or $18,700 if married and filing a joint return before they must file a tax return. Both dependent and non-dependent students have to file if they earn $400 or more from self-employment or if they withdraw funds from a tax-deferred account, such as an IRA. Keep in mind that you probably will have payroll taxes deducted from your paychecks. You may want to file voluntarily to get any tax refund due you or to claim tax credits you qualify for.
- Student financial aid in the form of loans is not taxable. However, grants or scholarship money may be taxable in some instances. If the money is used for qualified expenses, such as tuition, fees and books, it is not taxable. This also applies to the purchase of supplies such as computers and to necessary transportation expenses. However, excess grant or scholarship money over and above qualified expenses is considered taxable and you have to report it on your tax return.