Question

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.

Answer

 

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.

 

Related Topics

Related Resources

Business Tax Credit For Fuel Use

If your business uses gasoline or diesel fuel, you may earn a tax credit. Learn more about excise tax credit for fuel and get tax answers at H&R Block

What is an exemption?

Learn the definition of a tax exemption and how it may apply to your specific tax situation, with help from the tax pros at H&R Block.

California Tax Rates

Are you a wage earner in California? If so, you may owe California income tax. Learn more about California tax rates, based on your filing status and AGI.

Do You Need To Itemize Charitable Donations?

Do you need to itemize your charitable donations to claim them on your taxes? Learn more from the tax experts at H&R Block.