<p>After my accountant filed our Fed. income tax return, I realized that I declared d's grant which was large, but forgot $500 local scholarship. D has not filed her taxes yet. We received 1098 T form for the grant but nothing for scholarship which is probably why I forgot about it. Not sure what to do... should I just forget the scholarship and see if we get nailed? Would like some advice here before discussing with accountant</p>
<p>Why would you include D’s grant or scholarship on YOUR filing? Any taxable grants/scholarships would get filed on her . She got the money, you didn’t.</p>
<p>Didn’t the 1098T have her name on it? If so, it would be her filing.</p>
<p>Was any of the grant for tuition or fees or books? If so, I don’t think that part is taxable.</p>
<p>Now that you reminded me of this m2ck, I realized exactly what you said is correct so there is no need to tell my accountant about the scholarship. I think my accountant needed the number for the grant in order to figure out if we qualified for the AOC (which we did)–deduct grant from costs and what was left over was paid for with my d’s coverdell. </p>
<p>So I guess I state the grant and scholarship info just on the PROFILE. And since the amounts did not exceed college costs, they are not taxable–correct?</p>
<p>I don’t think the benchmark is “college costs”. I think scholarships that cover room, board, etc are taxable.</p>
<p>Hopefully others can clarify.</p>
<p>I know my accountant told me clearly that only when scholarships, grants, etc. exceed eligible college costs are they taxable.</p>
<p>The 1098-T is used by the parent to determine eligibility for the AOC. If the scholarship was sent directly to the school they should have included the $500 in the 1098-T calculations. The AOC is only for qualified expenses (tuition, required fees, books). If you used a Coverdell account for the qualified expenses you cannot claim the AOC due to the tax favorability already provided for a Coverdell. If you paid qualified expenses (cash/loans) then you can claim the AOC. If the grants/scholarships were used for unqualified expenses (room & board) then they are taxable to the student.</p>
<p>NJ…I think you’re acct is wrong.</p>
<p>My son had to declare his housing scholarship.</p>
<p>Here is it from the IRS…</p>
<p>Taxable Scholarships and Fellowships</p>
<p>If you received a scholarship or fellowship, all or part of it may be taxable, even if you did not receive a Form W-2. Generally, the entire amount is taxable if you are not a candidate for a degree.</p>
<p>If you are a candidate for a degree, you generally can exclude from income that part of the grant used for:</p>
<p>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.</p>
<p>A scholarship generally is an amount paid for the benefit of a student at an educational institution to aid in the pursuit of studies. The student may be in either a graduate or an undergraduate program.</p>
<p>A fellowship grant generally is an amount paid for the benefit of an individual to aid in the pursuit of study or research.</p>
<p>Example 1
Tammy Graves receives a $6,000 fellowship grant that is not designated for any specific use. Tammy is a degree candidate. She spends $5,500 for tuition and $500 for her personal expenses. Tammy is required to include $500 in income.</p>
<p>Example 2
Ursula Harris, a degree candidate, receives a $2,000 scholarship, with $1,000 specifically designated for tuition and $1,000 specifically designated for living expenses. Her tuition is $1,600. She may exclude $1,000 from income, but the other $1,000 designated for living expenses is taxable and must be included in income.</p>
<p>scroll down about halfway…</p>
<p><a href=“http://www.irs.gov/individuals/students/article/0,,id=96674,00.html[/url]”>http://www.irs.gov/individuals/students/article/0,,id=96674,00.html</a></p>
<p>It looks like monies covering housing and meals are taxed…but maybe I’m not reading it right.</p>
<p>I think that’s the difference–the grant and tiny scholarship my d received was not earmarked towards a particular cost (tuition vs housing vs supplies etc.). The grant was good sized (12,000) but didn’t even cover the tuition (20035). These are fall semester numbers only. R&B was around $6500.</p>