Q. Should I have entered grant $ minus BOG waivers* (& exp) on my return as income?
A. Yes. Scholarship amounts that exceed qualified expenses are taxable income to the student. "Qualified Educational expenses" (QEE), for scholarship money to be tax free are tuition, fees, books and other course materials, including a required computer. Room and board and other living expenses are not QEE.
Scholarship money is a hybrid between earned and unearned income. It is earned income for purposes of the $13,850 filing requirement ($14,600 for 2024) and the dependent standard deduction calculation (earned income + $400 ($450 for 2024)). It is not earned income for the kiddie tax and other purposes (e.g. EIC). For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions.
*California College Promise Grant (CCPG) formerly known as BOG (Board of Governors) fee waiver
