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

10 Ways Getting Married Affects Your Taxes in 2018

What happens to your taxes after marriage? Learn how marriage can lead to changes in tax filing and returns at H&R Block.

Tax Reform and Expats – A Brief Look Ahead

Expats are subject to recent changes under the Tax Cuts and Jobs Act much like any other taxpayer. Read on to learn more about how to prepare in the Tax Information Center.

What Is An ITIN? All You Need To Know

An ITIN is issued by the IRS to help people file taxes without a Social Security number. Learn how to get an ITIN number, who qualifies, and where to apply.

What Is Virtual Tax Preparation?

Virtual tax preparations let you complete your taxes online from the comfort of your home. Find out how easy remote tax preparations can be at H&R Block.