Does fin aid refund that goes back to school bills affect my income?

Paying for College
1

<p>Hi there, </p>

<p>Here's a rundown of my situation:</p>

<p>Housing was late this year and didn't assign rooms or bill charges until 8/27. My tuition and scholarships/grants were handled on 8/24, and since there weren't any balances left on 8/26, the school sent out a refund check for $3,400. Meanwhile, housing charges went up today, and my balance is $4,200.</p>

<p>So, I called my school and asked if they could somehow void the check and just put my money back in my account so that I only owe $800, but they said that they couldn't. Now I know that I have to deposit the check into my account and then write them a check/pay with a debit card before 9/24 to settle my account. </p>

<p>Since this money is going right back to my school, does this count as income like it would if I didn't have the housing bill and just kept it? Can my tax preparer show this and deduct it? I'm really nervous about this and I just want to make sure. </p>

<p>Thanks!</p>

2

<p>Financial aid money that is used to pay housing and board costs would be income regardless. You will get a 1098t in January…and it will list both allowable expenses and your awards. Any award in excess of tuition, fees, books, will be taxable income for you next year…I believe.</p>

3

<p>Thumper is correct. Scholarships and grants used to pay for non qualified education expenses are taxable income. Room and board are not qualified expenses. makes no difference whether the money was refunded to you or not. </p>

<p>If any of the aid is from loans, that is not taxable of course.</p>