<p>Are undergraduate scholarships taxable income? Does it matter if they are merit or need-based?</p>
<p>Room and board are taxable, tuition and books are not.</p>
<p>At the end of the year, the school sends the tax form to us. This is a merit award, so I am not certain for need-based.</p>
<p>Undergrad scholarships that exceed allowable expenses (tuition, fees, books) are considered taxable income for the student.</p>
<p>Scholarships that are used to pay room, board, travel, and personal expenses would be taxed.</p>
<p>Forgot about those fees. Cross posted with thumper1.</p>
<p>thumper1
</p>
<p>Thanks, thumper!</p>
<p>was for less than 50% of the cost of tuition (annual tuition $40K). College requires students live in college owned housing (approximately $10K per year). How are scholarships allocated?</p>
<p>If the scholarship is for less than the tuition, it will not be taxed. For example, my son got a scholarship from his university and then his room charge was paid by his ROTC unit. Both scholarships together were less than the total cost of tuition. The money will not be taxed.</p>