American Tax Credit; do you claim book costs if Pell Grant covered it all?

[Akauff67]

I am a full time college student and worker. I'm 25. I received the max Pell Grant because my husband and kids are poor. Yay us. My average tuition is around 1.5k. I use the rest of the money to pay rent, buy books, etc. 

If my Pell Grant covered all of my books and access to websites to do my education, do I deduct that when it asks for Books, Supplies, etc? 

Thank you.

[MaryK4]

No, if your Pell grant covered your tuition and books, you cannot use them as qualified educational expenses for the education tax credits.  

[Hal_Al · Accepted solution]

Q. If my Pell Grant covered all of my books and access to websites to do my education, do I deduct that when it asks for Books, Supplies, etc?

A. Maybe. 

The general rule is that you may not claim expenses that were covered  by tax free grants and scholarships.  But you are allowed to treat your scholarship (particularly Pell grants) as taxable income, so that you can use the expenses to claim the tuition credit. If you are a half time or more undergraduate, this usually comes out in your favor (the little bit of tax you may pay on the scholarship is offset by the generous (100% of expenses up to $2000)  tuition credit.

Note: the portion of the Pell grant that  pays  rent and food is already taxable. Only the portion that pays tuition & books (and a computer) is normally tax free.