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No, they don’t.</p>
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<p>Scholarship money and grants that are in excess of tuition, fees, required books are taxable to the student. Expenses such as room and board are not qualified education expenses so can not be used to make scholarships/grants nontaxable and are not eligible expenses for the tax credits. The only tax benefit that room and board is eligible for is that it counts as a qualified expense for 529 account distributions. But not for tax credits. </p>
<p>For tax credits only tuition and fees and required books and equipment are qualified expenses. And you cannot use the same qualified expenses for more than one tax break. So if grants or scholarships were uses to pay tuition and fees (making the grants/scholarships non taxable) then you cannot also use those same expenses to claim the tax break for tax credits or 529 account distributions. No double dipping.</p>
<p>One exception is that room and board qualified as an education expense in 2009 for students in mid western disaster areas for the Hope credit. Otherwise they do no count for the other tax credits.</p>