In general, any payments to you in excess of qualified education expenses are considered taxable income to you. If you don't ever receive any payments (they pay the school directly), you won't have to report any income on your tax return. On the other hand, if you take the money monthly and you end up receiving more than your qualified education expenses, you will have to report the difference on your tax return - but you may want to do that....
Depending on many factors and the terms of your grant or stipend, you may be able to benefit from reporting the income, applying it to other expenses (non-qualified expenses) in order to take advantage of the education credits you otherwise would not qualify for.
Tax Benefits for Education: Information Center - Use can use this link (and included link to the Interactive Tax Assistant) to find out more information regarding your specific situation.
Including a scholarship in gross income can sometimes save on taxes. - If interested in learning more, please see this detailed explanatory article.
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