pell Grant

[grandmabee]

is this taxable if above tuition amount. I was thinking the pell grant is not taxable but I am not sure.

[kcjenkins]

From Pub 970

Pell Grants and Other Title IV Need-Based Education Grants

These need-based grants are treated as scholarships for purposes of determining their tax treatment. They are tax free to the extent used for qualified education expenses during the period for which a grant is awarded.

So you consider not just tuition, but other qualified expenses as well.

Qualified education expenses. For purposes of tax-free scholarships and fellowships, these are expenses for:

• Tuition and fees required to enroll at or attend an eligible educational institution, and

• Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in your course of instruction.

Expenses that do not qualify. Qualified education expenses do not include the cost of:

• Room and board,

• Travel,

• Research,

• Clerical help, or

• Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution.

[Jack from Ohio]

Simple answer - not taxable.

[kcjenkins]

Usually, Jack, but not all of it, always. If, in fact the grant is for more than the tuition and qualified expenses, then the excess is taxable.