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If you received form 1098-T Tuition and the Box 5 Scholarships are greater than the amount in Box 1 or 2, the difference may be added as income, on your income tax return.
Generally, you pay income taxes on taxable scholarships and grants but not social security or Medicare taxes.
Scholarship, fellowship,
stipends or grant money, if not used for qualified education
expenses is taxed as income and belongs on Form 1040 Line 7 with SCH in front of the line number.
Per IRS Publication 970 Tax Benefits for Education : Payment for services. In most cases, you must include in income the part of any scholarship or fellowship that represents payment for past, present, or future teaching, research, or other services. This applies even if all candidates for a degree must perform the services to receive the degree.
To enter scholarships, grants, stipends NOT INCLUDED on your Form 1098-T:
To enter scholarships, grants, stipends INCLUDED on your Form 1098-T:
See the screenshot below.
Related information:
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