Q. If my Pell Grant covered all of my books and access to websites to do my education, do I deduct that when it asks for Books, Supplies, etc?
A. Maybe.
The general rule is that you may not claim expenses that were covered by tax free grants and scholarships. But you are allowed to treat your scholarship (particularly Pell grants) as taxable income, so that you can use the expenses to claim the tuition credit. If you are a half time or more undergraduate, this usually comes out in your favor (the little bit of tax you may pay on the scholarship is offset by the generous (100% of expenses up to $2000) tuition credit.
Note: the portion of the Pell grant that pays rent and food is already taxable. Only the portion that pays tuition & books (and a computer) is normally tax free.
