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If you received a Pell grant, you won’t include the grant amount in your federal taxable income unless you used the funds for unapproved purposes.
Generally, for the Pell grant to retain its tax-free status, you must be a degree candidate at the college and only use the funds to pay for tuition, fees, books, supplies and equipment. However, if you use the funds to pay your room and board or even school-related travel expenses, then you must include the portion of the grant you use to pay these expenses in taxable income.
To report a Pell Grant (or portion thereof) that is taxable:This will report your scholarships on line 7 of your Form 1040, and you will not be subject to Self Employment Tax.
If you received a Pell grant, you won’t include the grant amount in your federal taxable income unless you used the funds for unapproved purposes.
Generally, for the Pell grant to retain its tax-free status, you must be a degree candidate at the college and only use the funds to pay for tuition, fees, books, supplies and equipment. However, if you use the funds to pay your room and board or even school-related travel expenses, then you must include the portion of the grant you use to pay these expenses in taxable income.
To report a Pell Grant (or portion thereof) that is taxable:This will report your scholarships on line 7 of your Form 1040, and you will not be subject to Self Employment Tax.
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