<p>I was wondering if anyone knows if the NMF Scholarship received from UA is taxed? My very uneducated knowledge is that the room portion is taxed and maybe even the summer travel portion. If it is taxed, is that on the student or parent? My student doesn’t have a job, so she won’t be filing a tax return normally.</p>
<p>All scholarships and grants have basically the same tax rules. </p>
<p>The part of a scholarship/grant used to pay for tuition, fees, and required books is not taxable.</p>
<p>Scholarships/grants used to pay for non qualified expenses (anything else - including room and board) are taxable income.</p>
<p>They are taxable to the recipient - the student. This is better from a tax point of view because they will likely be taxed at a lower rate. The student will get the standard deduction (around 5600) before any of the income actually attracts any tax. Then the next few thousand will be at 10%. If your student has enough income to be required to file (above the standard deduction for earned income - taxable scholarships are treated as earned income, a much lower cut off for unearned income), then she will need to file a federal return and possible a state return (depending on the State).</p>
<p>Remember taxes are based on the calendar year, not the school year, so as a freshman it will be just the fall semester scholarship money you will need to look at.</p>
<p>If you google IRS 970, it has all the different rules for the different education related taxes.</p>
<p>The student will get the standard deduction (around 5600) before any of the income actually attracts any tax. Then the next few thousand will be at 10%.</p>
<p>Another note…</p>
<p>Yes…taxable on the CHILD, and students often don’t have much income.</p>
<p>Bama only reports the lower amount for housing (reg room rate)…NOT the honors rate. I think the regular rate is about $5k per year.</p>
<p>Our son’s taxable amount wasn’t noticeable at all. He has a part-time job and still got a tax return. I guess the total amount was too low to be taxed at any noticeable amount.</p>
<p>He wasn’t taxed on the Study Abroad money…guess that was considered “tuition”.</p>