If you’re enrolled in a degree program or are pursuing a training program that prepares you for specific types of employment and you use your Pell grant to pay for “qualified education expenses,” you don’t need to report your grant on your tax return.
To determine if your daughter's Pell Grant is taxable with or without a 1098-T form from your school, you can follow these steps:
First option:
Get the 1098-T Form: First, obtain the 1098-T form from the school's Bursar's Office. This form will usually provide enough information about whether all scholarships and grants, including the Pell Grant, are tax-deductible.
Second option:
If the 1098-T form is not available, you can still determine if your daughter's Pell Grant is taxable by following these steps:
- Check if the Pell Grant was used for qualified education expenses, such as tuition, fees, books, supplies, and equipment required for courses. These expenses are tax-free
- Determine if any portion of the Pell Grant was used for non-qualified expenses, like housing, travel, or other personal expenses. These amounts are taxable and must be reported as income
- Access your daughter's financial account on the school's website. Look for billing statements, invoices, or account summaries that detail how the Pell Grant funds were applied
- Subtract the total qualified education expenses from the total Pell Grant received. The difference, if any, is the taxable amount
Based on Option 1 or 2 - If you determine that part of the Pell Grant is taxable,
- Be sure you are logged into TurboTax
- Then click here to enter educational income and expenses.
- Answer all questions
- When you get to did you receive a 1098T select yes or no, which ever is applicable and
- Continue through the questions
For Additional information click below:
TurboTax - is my PELL Grant Taxable
