Student Income Tax Return Guide

Student TaxesHere is a detailed overview of tax issues that you will face as a student. Think of this page as Student Income Taxes 101.

How to File a Tax Return and Get Student Tax Benefits

If you are a student or a young person who just got their first job, here are the tax-related steps you will need to take:

List Item 1 Complete a W-4 federal tax withholding form, and a form for your resident state:

Learn how to complete a W-4 Form.

Find the IRS W-4 Form or your state's tax withholding form.

Adjusting your federal tax withholding.

List Item 2 Find out if you have to (or might want to) file or efile a federal tax return:

Do I have to file a tax return?

Why might students want to file a tax return?

Which tax form should I file or efile as a student?

Do I file separately or with my parents?

What are the tax deadlines? When is my tax return due?

List Item 3 Learn about tax credits, tax deductions, and tax savings for students:

What type of income do I have to report on my tax return?

What are tax breaks or tax benefits?

What schools qualify for tax benefits?

What tax records should students keep?

Can I get education credits?

What are ways for students to save money on taxes?

If I'm a foreign student: are the tax rules any different for me?

How do I apply for Financial Aid?

What if I cannot pay the taxes I owe?

Do I Need to File a Tax Return?

If you are a single and under 65 years of age, you must file a tax return if: 

  • You were claimed as a dependent and received more than $6,100 in earned income (or $400 from self-employment, or $108.28 from a church, or $1,000 from unearned income) OR
  • If you were not claimed as a dependent and earned more than $10,000.

Besides income and dependency status, you should consider other factors such as age and filing status to help you determine whether or not you need to file a tax return. Learn more about whether you have to file a tax return.

According to the IRS rules, you DON'T have to file a tax return if any of the following is true:

  • You are claimed as a dependent by your parent or legal guardian in their tax return and your income was part of the household income and thus can be added to their annual total household income. Learn more about qualifying as a dependent.
  • You are claimed as a dependent and your earned income (salary, wages, tips and commissions) for the year was not greater than $6,100, and you had no unearned income.
  • You are claimed as a dependent, you had no earned income, and your unearned income like investments, interest and dividends, for the year did not exceed the larger of a)$1,000, or b)your total earned income plus $350 (up to $5,750).
  • You are claimed as a dependent and you earned income from self employment that was less than $400. Self employment income may be from babysitting, mowing lawns, delivering newspapers, selling art, running a lemonade stand in the summer, etc.
  • You are claimed as a dependent and earned less than $108.28 from a qualified , tax-exempt church or church-sponsored organization. Learn more about qualified charitable organizations.
  • You are NOT claimed as a dependent and your total income for the year was less than $10,000 ($20,000 if married jointly and under 65 years of age, and $12,850 if filing as head of household).

For detailed information on filing requirements, review IRS Publication 501 - Exemptions, Standard Deduction, and Filing Information.

Why Might Students Want to File a Tax Return?

It might be beneficial for you to file an income tax return for various reasons. For example, if you worked at a job where your employer withheld taxes from you, you would want to get a refund of that money in the case where you don't owe any taxes. Also, to claim any tax credits, like the Earned Income Credit, Health Coverage Tax Credit, Additional Child Tax Credit, or 40% of the American Opportunity Credit, you will need to file a tax return.

Learn more about why you may want to file a tax return.

Which Tax Form Should I file or efile as a Student?

If you fulfill the residence requirements, then you should file either Form 1040, 1040A, or 1040EZ. If you do not fulfill the residence requirements, then you should file form 1040NR or 1040NR-EZ. See our foreign student section for more information.

Do I File Separately or with My Parents?

There are conditions that must be met in order for your parents to claim your income in their tax return, which would mean you would file with your parents. All of the following conditions must be met for them to do so:

  • If you were under 19 or under 24 as a full time student by the end of the year.
  • The only income you receive is from interest and dividend payments, including payments from the Alaska Permanent Fund.
  • You gross income was under $10,000.
  • You are not filing a return or a joint return.
  • No estimated tax payment was made for this year and no tax overpayment was made from the previous year or amended tax return in your name or Social Security Number.
  • No federal income tax was taken out of your income under the backup withholding rules.

Then one of your parents can claim your income as part of their return, thus exempting you from having to file a tax return. If your parents are married and filing jointly, then your income can be claimed on their joint return.

 What Are the Tax Deadlines? When is My Tax Return Due?

There are several important tax deadlines concerning both your federal and state taxes. Learn about important IRS tax deadlines and state tax deadlines.

What Type of Income Do I have to Report on My Tax Return?

Even if you are a student, you aren't exempt from filing a tax return if you had income. For example, if you were self-employed for some portion of the tax year and earned more than $400.00 during that self-employment, you will have to file a federal tax return and pay the necessary self-employment tax (Social Security and Medicare). You may also be required to pay Medicare and Social Security tax on tips that you did not report to your employer or if you worked for a church or religious organization that was exempt from those taxes.

Student Income - Is My Income Taxable?

There are many forms of income that students often receive which qualify as taxable income. Some of them are:

  • Pay for services performed, like wages, salaries, tips, ROTC active duty pay (for example, pay that you received during advanced camp during the summer--but not ROTC subsistence allowances)
  • Self employment income that includes but not limited to lawn mowing, babysitting, newspaper delivery, etc.
  • Investment income like interest and dividends received
  • Scholarship and fellowship money that is NOT used for tuition, any kind of school fees, or cost of required books and school supplies (you must be enrolled in an undergraduate degree program)

For details on whether or not your income is taxable, review IRS Publication 525 - Taxable and Nontaxable Income.

Remember that the IRS taxes a dependent's or child's investment income. If you are filing with your parents, they have to report it. Otherwise, if you are filing separately and not with your parents, you have to report it since it's considered taxable income. Learn more in Publication 929 Tax Rules for Children and Dependents.

If you are receiving tip income, learn more about it in Publication 531 - Reporting Tip Income

Also, find out if your student income is subject to federal income tax in Publication 17 - Your Federal Income Tax.

What Are Tax Breaks or Tax Benefits?

Tax benefits (or tax breaks, as they are sometimes called) include tax credits as well as tax deductions. Tax credits allow you to deduct certain costs and expenses from your total income, and they are sums of money that are added to your tax refund or subtracted from the amount of tax you owe. Tax deductions reduce your taxable income, and your total deductions are subtracted from your taxable income in order to determine your total tax bill for the year. 

Both tax deductions and tax credits have certain qualifications and conditions that one must meet in order to claim them.

What Schools Qualify for Tax Benefits?

Any accredited university, community college, trade or vocational school, or adult/continuing education class will qualify for some or all of the student tax benefits described on this page. Regardless of whether you are pursuing a Bachelor's Degree, a Master's Degree, a certificate, or even a PhD, your post-secondary educational institution and degree of choice will probably be eligible for one or more of these student tax breaks.

Learn more by reading Publication 970 - Tax Benefits for Education.

Will My School or University Send Me a Document Showing That I Can Claim a Tax Break or Benefit on My Return?

Generally, you should receive Form 1098-T, Tuition Statement, from your school. This form reports your qualified educational expenses to you and the IRS.

You may notice that the amount shown on Form 1098-T is different than the amount you actually paid. That’s because some of your related costs (such as textbooks) may not appear on the form. However, you still may be able to claim the costs as part of the credit. Please be aware that you can only claim an education credit for the expenses that you paid in the same Tax Year.

What Tax Records Should Students Keep?

It is generally a good idea to keep records for 3 years after you file a tax return. The IRS may select your tax return for audit up to 3 years after you file it. There is also the possibility that a new tax break may be retroactively introduced, and you may need documentation to claim it. If you don't have much space to store all your records, you can scan your documents and receipts to store them electronically.

Can I Get Education Credits?

There are two types of education credits that you can claim on your tax return: the American Opportunity Credit (formerly known as Hope Credit) and the Lifetime Learning Credit.

Please note that you can claim only one type of education credit per student on your federal tax return each Tax Year. If more than one student qualifies for a credit in the same year, you can claim a different credit for each student.

To figure the total credit amount for an eligible student, you may be able to include qualified expenses, such as tuition, fees, and other related expenses (books, supplies, equipment, and other required course materials, but not room and board). In addition, these credits are subject to income limitations, so your amount may be reduced or eliminated based on your adjusted gross income.

How Can Students Save Money on Taxes?

There are four major ways students can save money on taxes:

  • Credits: Tax credits directly reduce the amount of income tax you owe. The amount of a credit is directly subtracted from your tax liability. Some credits are refundable and will be paid to you even if you owe no taxes. If you want to claim a refundable credit, you will need to file a tax return. There are two student tax credits available: the American Opportunity Credit (which has replaced the Hope Credit) and the Lifetime Learning Credit.
  • Exclusions: Tax exclusions are parts of your income that do not have to be included in your gross income on your tax return. The most relevant forms of non-taxable income for students are scholarship funds and fellowship grants. Learn more about excluding scholarship and grant income.
  • Savings Plans: There are two special kinds of savings accounts which provide great tax benefits to students: Coverdell Educational Savings Accounts (Coverdell ESA's) and Qualified Tuition Programs, which are also known as 529 College Savings Plans.

Important: The Tuition and Fees Deduction expired on December 31, 2013, so it cannot be claimed on 2014 and later Tax Year returns.

If I'm a Foreign Student: Are the Tax Rules Any Different for Me?

The IRS does have special rules for foreign and international students, scholars, teachers, and exchange visitors. The rules largely depend on the immigration status of the person (resident alien, nonresident alien, dual status alien) and apply to taxable income and tax withholdings.

Foreign students who are resident aliens may be subject to some of the same taxes as U.S. citizens. However, if you are in the United States on an F-1 student visa (and you don't have a green card or don't satisfy the substantial residence requirement), you usually file your federal tax return as a nonresident alien. Unless you elect to be treated as a resident alien for federal tax purposes, you cannot claim an education credit for any part of the Tax Year. If you are a U.S. nonresident alien, you should file Form 1040NR or 1040NR-EZ (Find out which Form 1040NR you should file).

Learn more about foreign students and taxes in Publication 519 - U.S. Tax Guide for Aliens.

Adjusting Your Federal Tax Withholding

Filling out a W-4 form allows your employer to withhold a certain amount of money that is estimated to be the tax you may owe at the end of the year. However, you may be able to get some, or maybe all of that money back after you file your tax return if it turns out that you don't owe as much tax as was withheld.

Find out how and why to adjust your paycheck withholding.

Learn more about tax withholding in IRS Publication 919 - How Do I Adjust My Tax Withholding?

Estimate your tax allowances and withholding with our free federal withholding calculator.

How Do I Apply for Financial Aid?

When applying for financial aid, your college or university may ask you to provide old tax tax returns--either yours or your parents. To access an old tax return, you might need to obtain a copy or free transcript of a tax return from the IRS. A transcript of your tax return provides W-2 information along with the basic information that was filed with the tax return, including marital status, adjusted gross income, taxable income, and most line items from the tax return. The tax return transcript can be sent directly to the institution asking for it.

What if I Cannot Pay the Taxes I Owe?

The economy is tough on everyone, and the cost of a college education is an even greater burden. Don't fret; the IRS knows that money is tight and they will work with you if you need to set up a payment plan to make good on any back taxes you owe. Learn more about help with paying taxes.

Having trouble with money as a college student, or just in general? Read about money saving tips for college students and for everyone.

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