Is money from student loans considered taxable income?
A school loan is not taxable at the time you get the money and should not be included as income on your return. A loan is not income because you are expected to repay the amount borrowed (plus interest). If, at a later date, any part of the loan were forgiven, the amount forgiven would be income in that year. Under certain circumstances, student loans forgiven are not income. For more information, refer to Exceptions under Canceled Debts in Publication 525, Taxable and Nontaxable Income.
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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:
- You are a candidate for a degree at an educational institution,
- 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
- 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.
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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.
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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.
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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.
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