Foreign scholarship

[27rh]

I received a scholarship from the government of Taiwan to study Mandarin for three months at National Taiwan Normal University’s Mandarin Training Center in Taipei. I used part of the scholarship for tuition and fees and part for room/board, etc. I am not currently seeking a degree. Do I need to claim a foreign source scholarship on my taxes? If so, is the entire amount taxable? Thanks so much!

[ZhuoliA · Accepted solution]

Yes, the scholarship will be taxable if you are a tax resident in the U.S. because you are not currently seeking a degree. IRS Publication 970 specifies - "A scholarship or fellowship grant is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution."  However, you can reduce the taxable scholarship by the amount of qualified education expenses from eligible educational institutions. None of the education expenses will be deductible if National Taiwan Normal University is not listed as an eligible educational institution by IRS - what is an eligible educational institution. 

You can input any excess scholarship income (i.e., scholarship income minus qualified education expense) in TurboTax by following the steps below.

1. Log in to your TurboTax Online account, or open your TurboTax CD/Download program
2. Choose Take me to my return
3. Click on Federal Taxes
4. Click on Deduction & Credits
5. Locate Education
6. Click on Expenses and Scholarships (Form 1098-T)
7. Input any scholarship/grant  and education expenses in the education summary

 [Edited 01/27/2023 12:37 pm PST]

[27rh]

That’s helpful, thanks!