Generally, scholarships are not taxable income. In some instances, scholarships can be considered taxable income. That makes this question somewhat tricky to answer. Essentially if you are using your scholarship funds solely on qualified education expenses, and you are enrolled and pursuing a degree from an eligible educational institution, your scholarship funds are likely not taxable. Qualified educational expenses could include tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution. If you use your scholarship funds to cover unqualified educational expenses, or do not meet the criteria to keep your scholarships untaxable, you could be required to count the scholarship funds as part of your gross taxable income.
If you have a lot of scholarship funds, we recommend you consult a Certified Public Accountant or legal tax professional.
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