Simple answer: no. Just having grants does not make taxable or even reportable. Usually is it's taxable, you would get a 1098-T
But, taxes aren't simple. You do have to do your own "accounting", to see if you have anything to report. The general rule is if your grants (not including loans) exceeds you qualified higher educational expenses (QHEE - tuition, fees, books and other course materials), the excess is taxable income. That is if grants also paid for room & board, transportation and other personal expenses, it may be taxable income.
Furthermore, there is a tax “loophole” available. Even if all your QHEE was covered by grants, you or your parents may still be able to claim a tuition credit. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.
Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.
