<p>I am receiving scholarship money from a different county and they will be directly putting the money into a checking account I recently opened just for it. I didn’t receive any financial aid so they won’t be taking any money away since I don’t have any.</p>
<p>I have questions:</p>
<li>Do I need to report this to U of M? If so, how?</li>
<li>Is this tax-free?</li>
<li>I am so confused…</li>
</ol>
<p>Any help would be nice.</p>
<p>I believe that you will need to report this scholarship when you file taxes this year or if you apply for financial aid next year, but will also be able to deduct the expenses, such as tuition, for which you used it. If you use any of the money for non-educational expenses, then that portion would be taxed as income.
I see no reason to report it to fin aid – their only interest is that of assessing your resources and financial strength IN THE EVENT they are loaning or granting you money via FAFSA. You will want to keep your receipts of payments to your account, books, tuition, etc. to reduce the taxable amount (or zero it : )
Good luck!
PS You can always ask you tax preparer in advance the best way to manage same.</p>
<p>Thank you!!</p>