Is student scholarship award considered taxable income?
Question: I paid the tuition for my son to attend college. He lives in my home but my divorce agreement allows his father to take him as a dependent. Can I use the tuition I paid as a deduction or credit on my tax return?
To take advantage of the education (tuition and fees) related adjustment or deduction the payments must have been used for the taxpayer or their dependent’s education.
Since your son is not your dependent you cannot use the tuition payments as an adjustment or credit on your return. For the same reason his father cannot use the funds you paid as a deduction on his return either.
The only way you can take advantage of the tuition adjustment or deduction is to obtain an agreement from your son’s father allowing you to claim your son as a dependent for the years you pay for his education.
If this is possible, be sure you have IRS Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents, or a similar document signed by your son’s father and attach it to your return.
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Question: I have just received a tuition statement (Form 1098-T) from my daughter’s college and on it is a figure for the scholarship she received. Is this scholarship taxable income?
Students who receive academic scholarships may exclude from taxable income on their tax return the amount required for tuition, fees, books and supplies.
However, they must report as taxable income on their tax return any academic scholarship funds used for other expenses, such as room and board.Qualified academic scholarships and fellowships are treated as tax free amounts on your tax return if all of the following conditions are met: The student is a candidate for a degree at an educational institution; Amounts the student receives as an academic scholarship or fellowship are used for tuition and fees required for enrollment or attendance at the college, or for books, supplies and equipment required for college courses of instruction; The amounts received as an academic scholarship are not a payment for the students services, such as teaching other students.
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