If you receive a scholarship or fellowship grant, all or part of the amounts
you receive may be tax-free.
Qualified scholarships and fellowship grants are treated as tax-free amounts
if all 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.
Included in gross income are amounts used for incidental expenses, such as room
and board, travel, and non-required equipment, as well as amounts received as payments
for teaching, research, or other services required as a condition for receiving the
scholarship or fellowship grant.
If any part of your scholarship or fellowship grant is taxable, you may have to
make estimated tax payments. See Topic 355 for information
about estimated tax.
For more information refer to Publication 520,
Scholarships and Fellowships, and
Publication 970,
Tax Benefits for Higher Education. Publications and forms may be
downloaded from this site
or ordered by calling 1-800-829-3676.
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