My daughter received a presidential scholarship that pays 100% of her tuition cost and also includes the cost of housing at the dorm. The dorm cost is $2900 and a scholarship is awarded for that exact amount and listed at the bottom of her balances under grants/scholarships. It is also listed under box 5 on her 1098T.
My question is does taxes have to be paid on that $2900 scholarship considering her presidental scholarship awarded her that to cover the cost of the dorm? (I ask because I know that room and board is not considered a qualified expense and yet I don't believe it should be reported as taxable income because the school pays for it.
I hope that makes sense
