11 Education Tax Credits and Deductions Available

10. Qualified Scholarships, Fellowships, and Grants (Nontaxable for Qualified Uses)

Scholarships and fellowships are often nontaxable when used for qualified education expenses like tuition and required fees, and when the recipient is a degree candidate. However, amounts that pay for room and board, travel, or compensation for teaching or research may be taxable in part or in full. Schools issue Form 1098‑T and sometimes other reporting forms; taxable portions may need to be reported on your return. Example: A student who receives a scholarship covering tuition and required course fees typically does not report that amount as taxable income, while a stipend used for living expenses might be partially taxable. When in doubt, consult your school’s financial office, retain award letters, and check IRS rules for scholarship taxation.