<p>I have financial aid but I won't be getting a refund. I received some college grants that is going toward room and meal plan. Do you have to pay taxes on the financial aid that you get for room and board even if you don't get any refunds?</p>
<p>Any scholarships and grants that you get above qualified tuition and fees may be taxable to you. Maybe because the standard deduction for a dependent, which you most likely are, is $5700. So if that’s all the income you have and the amount is below that, it won’t be taxable. If it’s above $5700 together with any other income you have, it would be taxed at the student’s rate which should be very low.</p>
<p>You do have a standard deduction but yes…if you exceed that, you will have to pay taxes on scholarships used for room/board. You will get a 1098T form at the end of the year. It will list our qualifying expenses…and your scholarships. If your scholarship is more than your expenses, that will be added into your income. You will pay taxes on your income…but you do get the standard deduction.</p>
<p>In any event…the taxes paid will be FAR less than the money you are getting.</p>
<p>Yes, scholarship/grant money used to pay for room and board is taxable income. Receiving it as a refund or not is irrelevant, it is what it pays for that makes it taxable income. (tuition/fees/required supplies = not taxable; anything else = taxable).</p>
<p>WHether you will actually owe taxes will depend on your total income (including taxable scholarships/grants) for the year. You have a standard deduction of around $5700 before you start in incurring taxes.</p>
<p>And just to clarify, is it true that the potentially taxable money includes all “gift aid?”</p>
<p>Merit scholarship + university need based grant + Pell + SEOG?</p>
<p>Yes. Scholarships and need based grants are treated exactly the same for tax purposes.</p>
<p>You have to remember that they are qualified expenses. What you spend on tuition may not be taxable. If you get $24000 and the tuition and other qualified expenses is $20,000, you do not have pay taxes on $20,000.</p>
<p>[Are</a> Scholarships Taxable?](<a href=“http://www.fivecentnickel.com/2011/02/07/are-scholarships-taxable/]Are”>http://www.fivecentnickel.com/2011/02/07/are-scholarships-taxable/)</p>
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<p>So unless the aid specifically says meal plan, they you are OK. Let us say they give $5,000 but you are paying $20,000 in tuition, you are OK as your tuition expenses are more than the aid. But if they say, it is only for meals and board, then you have to pay taxes.</p>