Students Won’t be Taxed on Emergency Pandemic Aid, IRS Says
- College students don’t have to report grant money as income
- Colleges still need to include grants on some tax forms
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Students who received emergency financial aid grants related to the coronavirus pandemic won’t owe taxes on that money, according to the Internal Revenue Service.
Students also do not have to reduce the total of their tuition and related expenses by the amount of an emergency financial aid grant, which is important because that total could qualify for tax breaks. Students who used some or all of the grants to pay for qualified tuition and related expenses before the end of 2020 may be eligible to claim a tuition and fees deduction, the American Opportunity Credit or Lifetime Learning Credit, on their 2020 taxes.