Taxability of Financial Aid
A portion of the financial assistance you receive may be considered as taxable income. The following guidelines apply to students who are working toward a degree.
- Student loans are not considered income for federal tax purposes.
- Work-study earnings are considered taxable income. The college will report your earnings to the Internal Revenue Service (IRS). W-2 earnings will be mailed to students every January.
- The portion of any scholarship or grant attributable to services you perform is taxable as compensation.
- The portion of scholarship and grant assistance exceeding the cost of tuition, fees, books, supplies and equipment must be included as taxable income. (Room and board costs are not considered in the calculation.)
To comply with the IRS requirements, you will need to determine the portion of your scholarship, grant, or fellowship assistance required to be included as taxable income on your tax return. You should keep receipts for all tuition, fees, books, supplies, and equipment required for your degree program. The difference between these costs and the amount of your scholarship, grant, or fellowship awards is the amount that must be included as taxable income.