Do you have to pay taxes on grants you receive for school?

Question

I am currently going to college and am basically going for free because I got grants that covered the total cost. Does anyone know if this has to be counted as income on my taxes? I don't really want to owe anything.

Answer 1

If you have fellowship grants, they are counted as earned income according to IRS. So it depends what kind of grant you have. It also depends if you're dependent or not, or if you have other income. IRS has a cap on income for students. Here's an excerpt from IRS Tax Form 1040EZ Instructions
"IF your filing status is . . . THEN file a return if your
gross income* was at least . . .
Single................................$ 8,450
Married filing jointly** ........$16,900"

If you're 24 years and under and a full time student you are a dependent. So you're parents will have to claim you as their dependent. So it's complicated, it all depends on everything that you do. And I don't know the details, so I can't tell. Here's a link to the info about scholarships and grants...http://www.irs.gov/businesses/small/international/article/0,,id=106193,00.html

you can also stop by HR Block or Jackson Hewitt to ask them. Good luck.

Answer 2

The grants are made out to the school. The school takes their cut and often gives you the rest......if any is left. I don't remember ever using the grant as "income received" on taxes, because it's not actual income you "earned" as stated. You should be fine since it's not earned income. If you're really worried about it, talk to the financial aide office and see what they think......but I never claimed any pell grants, scholarships, or student loans.......and I haven't been audited yet.