How to Claim Scholarships on Taxes
- 1). Contact your financial aid office to find out the cost of tuition and fees charged by the school. These costs vary by school and by year. Room and board, transportation and other non-required fees do not count. In Publication 970, the IRS defines required fees as "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."
- 2). Subtract the total cost of your qualified expenses from your total scholarship amount. If the scholarship is less than your expenses, none of it is taxable. For example, if you have $21,500 in scholarships and only $19,900 in qualified expenses, you would have to report $1,600 in scholarship income.
- 3). Report the amount of your scholarship income, along with any other earned income on the appropriate line of your tax form. For Form 1040EZ, write the amount on line 1. For Forms 1040 and 1040A, write the amount on line 7. For all forms, if you did not receive a W-2 form form your scholarship, write "SCH" and the amount next to the line on which you reported the income.