Yes, grants can be taxable in some situations. It depends on how much your qualified education expenses and your grants and scholarships are and how you complete the education section.
This is how to complete the education section in TurboTax Deluxe Desktop:
- Open your return and select the Federal tab.
- Select Deductions & Credits.
- Select I'll choose what I work on, on the right.
- Scroll down and look for Education.
- Find Expenses and Scholarship (Form 1098-T), click on Start or Update to the right.
- Answer the first question Yes.
- Use the next few screens to enter your 1098-T. If your box 5 amount is more than your box 1 amount, the excess will be taxable.
- Answer the next questions carefully. If your grants or scholarships are already included on your tax return, be sure to indicate that on the screen, Was Any of Your Financial Aid Already Included As Income?
- Continue to the end of the section.
Click here for more information about tax free financial aid and education credits.
If you still have questions about your situation, please respond back with more details, including the forms you received for your expenses, grants and scholarships.
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