Do I have to pay income taxes on my federal grant?

Question

I am a PhD student and recieved a federal grant. Do I have to pay income tax on this money?

Answer 1

According to Pub 970, "A scholarship or fellowship is tax free only if:

1) You are a candidate for a degree at an eligible educational institution, and
2) You use the scholarship or fellowship to pay qualified education expenses."

Since you are a PhD student, I suspect that you meet the first qualification. Check out the link below for more details regarding the second. Good luck! :-)

Answer 2

You would have received a form (can't remember the number) from the school/gov that you would have had to include as income. When your filling out your taxes, at least with TurboTax the interview asks if you received this form by number.

I had a similar question about a merit scholarship my daughter received - that turned out to be non-taxable.

Answer 3

If you are a candidate for a degree, you generally can exclude from income that part of the grant used for:

Tuition and fees required for enrollment or attendance, or
Fees, books, supplies, and equipment required for your courses.
You cannot exclude from income any part of the grant used for other purposes, such as room and board.

More info:
http://www.irs.gov/individuals/students/article/0,,id=96674,00.html

Answer 4

Ask the IRS. To do less is to gamble with your financial future and your good name.

Answer 5

no