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Frequently Asked Tax Questions

Interest, Dividends, Other Types of Income - Grants, Scholarships, Student Loans, Work Study

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Rev. date: 08/18/2012

I received an academic scholarship that is designated to be used for tuition and books. Is this taxable?

Grant   Scholarships and Fellowships   Taxable and Nontaxable Income   Tuition

The scholarship is not taxable if you satisfy all of the following conditions:

1. You are a candidate for a degree at an educational institution described in section 170(b)(1)(A)(ii) of the Internal Revenue Code.
2. You use the amount for tuition and fees required for enrollment or attendance at the educational institution, or for books, supplies, and equipment required for courses of instruction at the institution.
3. The amount received does not represent payment for your services (unless required by the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance Program).

Additional Information

Tax Topic 421, Scholarship and Fellowship Grants Publication 970, Tax Benefits for Education

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