IL is your resident state. All scholarship income used for qualified expenses is exempt from taxation at the federal and state level. According to Filing Requirements - Illinois Department of Revenue:
- a student, you are not exempt from tax nor are there special residency provisions for you. However, income, such as certain scholarships or fellowships, that is not taxable under federal income tax law, is also not taxed by Illinois.
NJ follows federal and state, qualified scholarships are not taxed. See NJ Division of Taxation - Exempt (Nontaxable) Income
Based on 1042S code 16 - scholarship income, no tax, not subject to withholding, you would need to determine if all of it was used on qualified expenses or if some was used by the student on other expenses. See Qualified Education Expenses - Internal Revenue Service
@Anonymous
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