Pell Grant, FSEOG Income on Tax Return

Forum|Forum|1 year ago
February 21, 2025
2 replies
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My spouse is full-time in college and received three grants in 2024 - the Pell, FSEOG, and CCPG (Californi Promise Grant).

The school did not issue a 1098-T because the CCPG covered her tuition expenses.

They have some educational qualified expenses, but less than the amount received from the Pell and FSEOG. Is this amount taxable for both grants? I have seen some information online suggesting that the FSEOG is not taxable and therefore this amount should not be included on the tax return but the Pell likely is and therefore should be included.

I am looking for some clarification before filing. Thanks for any help.

TurboTax PLUS Online

Hal_Al

Level 15

You say you have seen some information online suggesting that the FSEOG (Federal Supplemental Educational Opportunity Grant) is not taxable. I can find no such info.* But that may be academic. It would only mean that qualified expenses must be allocated to the FSEOG grant before being allocated to the Pell Grant. The Pell grant is definitely taxable, if not used for qualified expenses.

*Google AI says:

Federal Supplemental Educational Opportunity Grant (FSEOG) funds are generally not taxable if used for qualified educational expenses, such as tuition, fees, and required books. If FSEOG funds are used for non-qualified expenses like room and board, that portion may be considered taxable income.

Taxability Details for FSEOG:Tax-Free Usage:

The grant is tax-free if you are a degree candidate and the funds pay for tuition, required enrollment fees, and course-related supplies (books, equipment).

Taxable Usage: If the grant money exceeds qualified expenses and is used for room, board, travel, or personal expenses, the excess is taxable.

Reporting: Qualified scholarships are often reported in Box 5 of the 1098-T form, but they are not necessarily taxable.

Newaccountant1

Level 2

On the Federal Student Aid website, FSEOG is clearly listed among the grants that can be taxable if they are not used for qualified education expenses. Help Center, Visit FAFSA Help Center, “How do I answer the ‘College Grants, Scholarships, or AmeriCorps Benefits Reported as Income to the IRS’ question?”