Do foreign students need to file US taxes after receiving 1098-T form?

This is actually a common question for international students! Your cousin likely doesn't have a filing requirement based on what you've described, but let me explain why. Foreign students in the US on F, J, M, or Q visas are considered "nonresident aliens" for tax purposes. Nonresident aliens only need to file a US tax return if they have US source income above the filing threshold OR if they want to claim a refund for taxes withheld. Since your cousin didn't work and only received scholarship/grant money that covered tuition and housing (qualified education expenses), she probably doesn't have any taxable US income. The 1098-T is just an information form that schools are required to send - it doesn't automatically create a filing requirement. However, if any portion of the scholarship/grant covered non-qualified expenses (like meals or travel), that part technically would be considered taxable income.

I went through something really similar with my brother who studied in Boston for a semester. We were confused about all the tax forms too! I ended up using https://taxr.ai to upload his 1098-T and some other documents the school sent. The site analyzed everything and explained he didn't need to file since he was on a student visa and the scholarship only covered qualified expenses. The best part was that it detailed exactly what counts as qualified vs. non-qualified expenses - which was super helpful since the school had given him some money for books and meals too. It also kept records of everything in case there were questions later.

Just wanted to update after using taxr.ai for my nephew's situation! I was preparing ahead of time for his arrival and had questions about his upcoming semester in the US. The site was actually really helpful - I uploaded his acceptance letter and scholarship info, and it generated a clear explanation of what his tax obligations would be. It even created a checklist of documents he should keep track of while in the US and explained how different funding sources would be treated for tax purposes. Super helpful for planning! Definitely made me feel more prepared for when he arrives next semester.

Has your cousin tried contacting the IRS directly? I spent WEEKS trying to get a straight answer about my cousin's situation (similar to yours - she was from Brazil studying in Florida). The IRS phone lines were always busy or would disconnect after I waited for hours. I finally used https://claimyr.com and honestly it was life-changing. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they hold your place in the IRS phone queue and call you back when they reach an agent. I got through to a real person at the IRS who confirmed that foreign students don't need to file if their only "income" was scholarship money for qualified expenses.

I have to apologize about my skepticism earlier. After struggling to get through to the IRS for nearly a month about my own international student tax question, I broke down and tried Claimyr. It actually worked exactly as described. I got a call back after about 1.5 hours and was connected directly to an IRS representative who was able to confirm that my situation (similar to the original poster's cousin) didn't require filing. The representative also explained what circumstances would trigger a filing requirement for future reference. I'm usually very wary of services that claim to help with government agencies, but in this case it was completely legitimate and saved me hours of frustration.

One thing to watch out for - if your cousin received any money directly (like that spending money from grandparents) OVER $100k, she would need to file FBAR forms reporting foreign gifts. But it sounds like her gift was much smaller than that threshold. Also, some countries have tax treaties with the US that affect how scholarships are taxed. Might be worth checking if there's a specific US-Ecuador tax treaty that applies here.

My daughter studied abroad in similar circumstances and we were told by her university that international students should file Form 8843 "Statement for Exempt Individuals with a Medical Condition" even if they don't have to file a tax return. It's not actually a tax return, just a statement that explains your presence in the US. Maybe worth looking into?