College Aid

Today TaxMama hears from Don in Idaho, who asks, “Is financial aid from a community college taxable?”

Hi Don.

Well, there are all kinds of financial aid. So it depends on what you’ve gotten.

If it’s a loan or a grant that you must repay – nope. Not taxable. After all, you have to pay it back.

If it’s a scholarship or a grant that you don’t have to repay – then as long as the aid only covers tuition and books, it’s not taxable. If it covers living expenses, it’s probably taxable.

If it’s simply tuition reduction – then it’s not taxable either.

You can look things up here, in IRS Publication 970 Tax Benefits for Education.
http://www.irs.gov/publications/p970/index.html

And I hope you get all you need!

And remember, you’ll find answers to lots of answers to questions about education benefits and other tax information, free. Where? At TaxMama.com

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