Dependent exemption

[AccTaxMan]

I have a question about the support test of dependent exemption.

In Pub 17, it says, "To meet this test, the child cannot have provided more than half of his or her own support for the year."

And then it says "A scholarship received by a child who is a full-time student is not taken into account in determining whether the child provided more than half of his or her own support."

My question is: Are financial aids (such as FAFSA), which are not based on academic merits, considered "scholarship" according to the IRS?

[Kram BergGold]

Fafsa

One fills out a FAFSA form to get aid. Aid comes in two varieties. Grants/Scholarships, these are disregarded for support. You pretend that the expenses covered by grants/scholarsihps do not exist. Loans, these count as money used towards support.

[Koss]

Agree

In the context of the support test, a scholarship is any form of financial aid that does not have to be repaid, i.e., anything that is not a loan. It doesn't matter whether it is merit-based or needs-based.

BMK