I have a question about educational grants. Is my Pell Grant taxable if the amount I received for my Pell Grant is more than the amount billed for tuition and related expenses on my Form 1098-T.

Under certain circumstances is a Pell Grant taxable. Pell Grants and other Title IV need-based education grants are considered scholarships for tax purposes. So, Pell Grants and other educational grants are tax-free to the extent you use them for:

  • Qualified tuition
  • Fees, books, supplies, and equipment required for your course of instruction

You must use the funds during the period for which you receive the grant. However, if you do not use the entire amount of the grant for qualified education expenses the remaining amount is taxable.

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Calculators

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