If you’ve received a scholarship, grant, or fellowship, congratulations! Here’s how these sources of income will affect your taxes.
Are Scholarships and Grants Taxable?
Is my scholarship taxable income?
A scholarship is tax-free only if:
- You are a candidate for a degree at an eligible educational institution
- You use the scholarship to pay qualified educational expenses
What are qualified education expenses?
To remain tax-free, the income from scholarships must be used for these qualified education expenses:
- 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 the course of instruction
What are taxable expenses?
A fellowship stipend for your room and board, childcare, or transportation expenses are generally taxable. Any amounts paid for you to work, such as student teaching, are also considered taxable. Finally, any amounts leftover after covering tuition, fees, books, supplies, and equipment required for the program are taxable.
A fellowship stipend for your room and board, childcare, or transportation expenses are generally taxable.
Are grants taxable?
A grant is tax-free only if:
- You are a candidate for a degree at an eligible educational institution, and
- You use the grant to pay qualified educational expenses, and
- The grant isn’t a payment for time spent researching, testing, teaching, etc.
Are fellowships taxable?
A fellowship is tax-free only if:
- You are a candidate for a degree at an eligible educational institution,
- You use the awarded money to pay qualified educational expenses, and
The fellowship isn’t a payment for time spent researching, testing, teaching, etc.
Related articles

Section 529 Plans (Qualified Tuition Programs)
A Section 529 Plan (also known as a Qualified Tuition Program) is a great way to prepare for the financial burden of college expenses.

What is the Lifetime Learning Tax Credit?
What is the Lifetime Learning Credit, how do you qualify for it, and what expenses does it apply to?

What is the American Opportunity Tax Credit?
What is the American Opportunity Credit, how do you qualify for it, and what expenses does it apply to?

Why Jackson Hewitt®?
Our Tax Pros will connect with you one-on-one, answer all your questions, and always go the extra mile to support you.
We have flexible hours, locations, and filing options that cater to every hardworking tax filer.
We won't stop until you get every dollar you deserve, guaranteed. It's what we've been doing for over 35 years.