<p>Does anyone know if merit scholarships are considered taxable income? If so, to the parent or the student? Does it matter if the scholarship is offered by the college you want to attend or by an outside source like the
Coca-Cola scholarhip for example? Thanks.</p>
<p>Scholarships that cover tuition costs are not considered taxable. Ones that cover room and board are...for the student. The source of the aid doesn't matter.</p>
<p>scholarships potentially only affect the student's income, not the parent's. if tuition is greater than the scholarship money you get, your income is negative, and you pay nothing in taxes. if scholarship money is greater than total tuition, then the difference is considered income and is taxable.</p>