Hal_Al
Okay, I am understanding more, I think. As for the Covid Funds, though, I found the following on page 2 of pub 970:
"What's New for 2020 Emergency Financial Aid Grants under the CARES Act. Emergency financial aid grants under the CARES Act for unexpected expenses, unmet financial need, or expenses related to the disruption of campus operations on account of the COVID-19 pandemic, are not includible in your gross income. Because the grant is not includible in your gross income, you cannot claim any deduction or credit for expenses paid with the grant including the tuition and fees deduction, the American opportunity credit, or the lifetime learning credit. See FAQs: Higher Education Emergency Relief Fund and Emergency Financial Aid Grants under the CARES Act."
So, back to Q4,
Q4: My child received Covid Relief from the college. Does this get deducted from our qualified expenses?
A4. No. That's tax free money, like the stimulus you got, and is not designated for college expenses , per se.
I understand it is "free" money, but it looks like we have to use it for food and housing and medical because that is what was used when asking for the funds and how the school determined how much to give. Other students got more because they said they needed it for tuition, books, and fees, but since our child had so much scholarship money to cover those things, our child didn't ask for that. So, since we didn't actually "pay" for those things due to the relief funds, don't those covid funds reduce how much of the scholarship we can then shift to the student in order to have more qualified expenses of tuition and fees for the AOC?
