Federal Tax, Tax

Are College Scholarships Taxable Income?

If a student receives a scholarship or grant, all or part of the amounts received may be tax-free. Scholarships and grants are tax-free if certain conditions are met. In two new Private Letter Rulings, the IRS approved two private foundations’ procedures for awarding scholarships and grants. The awards were made on a nondiscriminatory basis and met the requirements of the tax code. One foundation wanted to provide scholarships to students pursuing higher education at accredited colleges or universities. The other wanted to support students “who require additional financial support to stay in school” at post-secondary educational institutions. (LTR 2002420032 and LTR 202420033). Contact us with questions. © 2024