Reporting income tax with study abroad program scholarships

[Douglas Heintz]

I would consult the following document and an accountant:

http://www.irs.gov/publications/p970/ch01.html

In particular, I think you will find the following section of "Qualified
Educational Benefits"  (Those expenses that qualify as "tax-free.":

   -

   Tuition and fees required to enroll at or attend an eligible
   educational institution, and
   -

   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.

This means, that you must pay tax on any portion of the fellowship or
scholarship that is used to pay for any un-qualified educational expenses,
like room and board, no matter what the source of the scholarship or
fellowship.  Interestingly, the source of a government fellowship is not
required to withold taxes on your behalf.  You must pay and calculate your
tax independent of the source.

-Douglas Heintz

On 6/17/07, Dustin Hosseini <iamlearningenglish at gmail.com> wrote:
>
> Candice,
>
> I could be wrong, but I believe you don't have to report those kind of
> expenses, since they are for education.  Room and board abroad are
> inherently apart of the program since you are studying outside of your own
> country; these are necessities, and therefore can be counted towards an
> "education" label on your tax return.
>
> Actually, this seems like a "gray area" in terms of what's required and
> what's not.  The funds are government provided for education; they were
> not
> earned as income or profit, nor are they a gift.
>
> If you're really concerned, call the IRS and be prepared to sit on the
> line
> for a bit.  Otherwise, I would not worry and assume it's a non-taxable
> educational grant – for all parts of the program.
>
> When I was a college student, I generally counted all grants as
> non-taxable,
> since they were provided by the federal government.  It doesn't make sense
> for the government to tax grants that it gives to people for educational
> purposes.
>
> Dustin
>
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