3 answers

Is scholarships taxable?

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3 answers

Rachit’s Answer

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Hi!

Scholarships are not taxable if you use it towards tuition, fees, supplies and books. However, it is taxable if used for any other purpose (like room & board, meal plan, campus gym, etc.). I am a college student and mostly use my scholarships to pay for my tuition for this very reason.

One exception to this situation is if you are a Resident Assistant. The cost of housing is not included in your income.


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Eric’s Answer

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All or part of the scholarship amounts you receive may be tax-free if you are trying to earn a degree and you are spending the money on tuition (including enrollment fees) and books, supplies, and required equipment for your courses. Some amounts may be taxable if they are spent on other things such as rent, travel, and non-required equipment.


A good place to begin researching any tax questions is typically the IRS website. However, certain answers depend on facts and circumstances which can be very detailed.


https://www.irs.gov/taxtopics/tc421

Eric recommends the following next steps:

  • Reach out to your counselor for additional financial resources offer by your school. Most colleges should offer a tax assistance programs like VITA (Volunteer Income Tax Assistance).
  • Reach out to a tax professional for guidance if you have complex facts and circumstances. There are also many references on tax preparation software websites such as Turbo Tax.
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Lillian’s Answer

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Typically, scholarships and grants are not taxable. However, stipends and educational awards usually are. Try reading the fine print of the specific scholarship you're asking about and/or ask the committee in charge.

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