See this IRS webpage on the taxability of scholarships.
https://www.irs.gov/taxtopics/tc421
each person can gift a donee up to $19,000 for 2025 without having to file a gift tax return.
in addition, each individual has a lifetime exclusion of about $14 million. only gifts to a donee over the limit during the year require form 709 and count against the lifetime exclusion
The donee is never taxed on a gift.
support is not a gift.
as to amounts spent for education, this is what the instructions from the gift tax return form 709 say.
Educational exclusion. The gift tax does not apply to an
amount you paid on behalf of an individual to a qualifying
domestic or foreign educational organization as tuition for the
education or training of the individual. A qualifying educational
organization is one that normally maintains a regular faculty and
curriculum and normally has a regularly enrolled body of pupils
or students in attendance at the place where its educational
activities are regularly carried on. See section 170(b)(1)(A)(ii)
and its regulations.
The payment must be made directly to the qualifying
educational organization and it must be for tuition. No
educational exclusion is allowed for amounts paid for books,
supplies, room and board, or other similar expenses that are not
direct tuition costs. To the extent that the payment to the
educational organization was for something other than tuition, it
is a gift to the individual for whose benefit it was made, and may
be offset by the annual exclusion if it is otherwise available.
