I received an academic
scholarship that is designated to be used for tuition and
books. Is this taxable?
Qualified scholarships and fellowships are treated as
tax-free amounts if all of the following conditions are
met:
1.
You
are a candidate for a degree at an educational institution,
2.
Amounts
you receive as a scholarship or fellowship are used for
tuition and fees required for enrollment or attendance at
the educational institution, or for books, supplies, and
equipment required for courses of instruction, and
3.
The
amounts received are not a payment for your services.
For additional information on Scholarship and Fellowship
Grants, refer to Tax
Topic 421, and Publication
520, Scholarships and Fellowships.
References:
Can I exclude any scholarship or grant from being taxed?
If you received a scholarship or fellowship, all or part
of it may be taxable, even if you didn't receive a Form
W-2. Generally, the entire amount is taxable if you are
not a candidate for a degree.
If you are a candidate for a degree, you generally can
exclude from income that part of the grant used for:
- Tuition
and fees required for enrollment or attendance, or
- Fees,
books, supplies, and equipment required for your courses.
References:
Can I exclude from taxable income the room and board portion
of a grant or fellowship?
No, you cannot exclude from income any part of the grant
used for other purposes, such as room and board. A scholarship
generally is an amount paid for the benefit of a student
at an educational institution to aid in the pursuit of studies.
The student may be in either a graduate or an undergraduate
program. A fellowship grant generally is an amount paid
for the benefit of an individual to aid in the pursuit of
study or research.
References:
Do I need to report income made as a work study student
at my college?
If you are enrolled in a state or local work-training
program under the Economic Opportunity Act of 1964, payments
you receive as compensation for services are wages and reportable
in gross income.
References:
Can scholarships used as payment for college tuition and
fees be claimed on Form 8863, Education Credits?
No. If you pay higher education expenses with certain
tax-free funds, you cannot claim a credit for those amounts.
References:
I cannot use Form 8863 because I received a scholarship,
what can I do?
You must reduce the qualified expenses by the amount of
any tax-free educational assistance. Do not reduce the qualified
expenses by amounts paid with the student's earnings, loans,
gifts, inheritances, and personal savings. Also, do not
reduce the qualified expenses by any scholarship reported
as income on the student's return or any scholarship which,
by its terms, cannot be applied to qualified tuition and
related expenses.
References:
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