AmyC
Expert Alumni

Education

You received a scholarship. If you used it towards your tuition payments, subtract it to find the tuition deduction.

If you used the scholarship toward food and your living expenses, it is taxable income and it is not subtracted to determine the tuition deduction.

 

If $10,000 tuition and received $8,000 scholarship that went towards classes, you have a $2,000 tuition deduction.

Some people pay tax on the scholarship income in order to claim a larger federal  education credit - if the scholarship can be used other than for tuition.   The IRS has a great brochure that explains how scholarships and tax credits interact.

 

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