Are my scholarships, fellowships, or grants taxable?

Your scholarship, fellowship or Pell grant is not included in your gross income (so not taxable) if some requirements are met. You must be a degree candidate at an eligible school. Your scholarship is then not included in income except for any part that:

• Is more than your qualified education expenses
• Is designated for paying non-qualifying expenses under the terms of the scholarship
• Is payment received for services like teaching or research, unless it’s from:
  • The National Health Service Corps Scholarship Program
  • The Armed Forces Health Professions Scholarship and Financial Assistance Program 
  • A comprehensive student work-learning-service program operated by a work college

Qualifying expenses include:

• Tuition and enrollment fees
• Books, supplies or equipment required for your courses

Non-qualifying expenses include:

• Room and board
• Travel and incidental expenses
• Any fees, books, and supplies or equipment that aren't required for your courses
• Clerical help

Here are some examples:

1. You used your scholarship to pay for tuition, and room and board. The room and board would be included in your income but not the tuition.
2. You got a $4,000 scholarship and had $3,000 in qualified education expenses. You’ll have $1,000 ($4,000 - $3,000) income added to the Wages, salaries, tips line of your tax return.