How to report scholarship and grants on tax returns?

Question

I'm a college student, and I'm filing taxes for the first time - and I have a question on how to file scholarships and such. I have a scholarship for full tuition and books, and then I have a Pell Grant and other need/merit-based grants which cover my room and board. So basically - I pay nothing for college, but am I supposed to report my grants as taxable income? I'm confused on how I should deal with this because including my grants as income would mean that I owe $500 in taxes - but I received that money from the government to begin with... so why should I give it back?

I didn't receive a W-2 or any forms for the grants, although I can view my 1098-T online. I know my scholarship for tuition and books is tax-free, but any insight on what I should do regarding the grants for room and board?

Anonymous · Accepted Answer

Qualified scholarships and fellowships are treated as tax-free amounts if all of the following conditions are met: 

- You are a candidate for a degree at an educational institution, 
- Amounts you receive as a scholarship or fellowship are used for tuition and fees required for enrollment or attendance at the educational institution, or for books, supplies, and equipment required for courses of instruction, and 
-The amounts received are not a payment for your services.

See link below for more info!

How to report scholarship and grants on tax returns?

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