How do (up to "full ride") scholarships work with grants?

Paying for College
6

<p>“room and board is taxable income, which means probably $500 a year in income tax”</p>

<p>This is actually a good thing in terms of your expenses, because even though the income is included on your daughter’s taxes, you yourself can probably claim a significant tax credit on your return, as the IRS treats the scholarship money that your daughter gets from the university for room and board (which, as mom2collegekids pointed out, she probably won’t even pay much tax for receiving) as taxable income paid by you, the parent. This can lead to get a generous educational tax credit for many parents. Here is last year’s education credits publication to give you an idea of what to expect.</p>

<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf&lt;/a&gt;&lt;/p&gt;