In general, personal grants such as this are typically non-taxable when the money is used for the intended purpose.
To make sure your grant is not taxable income, you can:
Review your grant agreement. This document should outline the specific terms and conditions of the grant, including any tax implications.
Ask the grantmaker. If the grant agreement doesn’t provide that information about the tax status of your grant, you can reach out to the organization that provided the grant. They should be able to help you on whether the grant is considered taxable income.
Search the IRS website. Visit the official website of the Internal Revenue Service (IRS) and look for information related to grants and taxable income. The IRS provides resources and publications that can help you understand the tax implications of grant money. I have included links to IRS resources on grants below.
Understand your state's laws. Your state may have different rules that may impact the taxability of your grant for your state income tax return. You can research the specific tax laws in your state’s Department of Revenue website to see if there are any additional considerations. Here is a link to find the contact information for your state: How do I contact my state Department of Revenue?
Click here for "Grants to individuals"
Click here for "Topic no. 421, Scholarships, fellowship grants, and other grants"
Click here for "IRC Section 4945(g) Individual Grants"
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