A fellowship is tax free only if:
- You are a candidate for a degree at an eligible educational institution, and
- You use the fellowship to pay qualified educational expenses.
Qualified Education Expenses
For purposes of tax-free fellowships, the income must be used for these qualified education expenses for:
- Tuition and fees required to enroll at or attend an eligible educational institution
- 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