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From Pub 970:
A student can't choose to include in income a scholarship or fellowship grant provided by an Indian tribal government that is excluded from income under the Tribal General Welfare Exclusion Act of 2014 or benefits provided by an educational program described in Revenue Procedure 2014-35, section 5.02(2)
(b)(ii), available at IRS.gov/irb/2014-26_IRB#RP-2014-35.
I take that to mean the grant is tax free, regardless of how spent and does not need to be reported. Furthermore, you don't have the option of declaring some of it taxable so that you, or your parent, can claim a tuition credit.
One, did you receive a form from the tribe showing this income? If so, that will help you know how to report it.
Two, it depends whether the aid was just for tuition and other direct education expenses, or also for indirect education expenses, like room and board while getting educated.
"To enter your scholarship income in TurboTax, in your return, go to Federal Taxes, Deductions & Credits, Education and the program will walk you through the information about your scholarship income, to determine what's taxable." from TT
I believe this "tribal assistance" is treated like a scholarship from any other source. The IRS has a publication on this. https://www.irs.gov/taxtopics/tc421 The bottom line is that if it was used for direct education expenses, you don't have to pay taxes on it, but you also can't take a deduction for the educational expenses it covered. If it included other aid beyond your direct education expenses, that part is probably taxable income to you, even though you spent it on room and board, laundry, running shoes, or whatever.
However, there might be an exception if it was viewed as benevolent aid rather than a scholarship. That might be a question for someone in the tribe. BUT if you didn't get a form reporting this income, you might not have to report it either, as the tribe would probably need to issue you a form if it needs reporting to the IRS.
From Pub 970:
A student can't choose to include in income a scholarship or fellowship grant provided by an Indian tribal government that is excluded from income under the Tribal General Welfare Exclusion Act of 2014 or benefits provided by an educational program described in Revenue Procedure 2014-35, section 5.02(2)
(b)(ii), available at IRS.gov/irb/2014-26_IRB#RP-2014-35.
I take that to mean the grant is tax free, regardless of how spent and does not need to be reported. Furthermore, you don't have the option of declaring some of it taxable so that you, or your parent, can claim a tuition credit.
Great answer. That sounds like the specific guidance this taxpayer needs!
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