Your college should have sent you a Form 1098-T.
- Box 1 on the 1098-T is the amount of your qualified expenses
- Box 5 is the amount of your scholarships and grants.
- If Box 1 is higher than Box 5, you do not have taxable income from the scholarship
- If Box 5 is more than Box 1, then you have income that is taxable
If you have scholarship money left over after covering your qualified education expenses, you must include that amount as part of your gross taxable income.
That means scholarship money used to pay:
- Rent or board
- Utilities
- And other expenses (including school supplies not listed as required in your program) counts as income when calculating your tax liability
In 2020, if you are single and under age 65 and have $12,400 or more in income you are required to file a tax return.
If you qualify, you can file your federal and state returns at no cost to you by using Free File. If you are claimed as a dependent by a parent or any other person, you will click the box that someone else can claim you. When you complete the tax return, you will know if you owe money to the IRS, or if you will receive a refund.
Qualified College Expenses
