I have a client with a child who received $30,000 in scholarship money, tuition for the year was $22,000. Does the child have to claim the $8,000 excess as income on his/her tax return? I am assuming the additional money is the child's income. Also, for SC, does anyone know if Coverdell ESA is considered a 529 plan (contributions to which can be taken as a deduction)?
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If I read
TTB correctly, there are tax-free scholarships if: degree candidate eligible institution, tp uses funds to pay qualified education expenses. Does this apply to your situation? -
Scholarship
Yes, the student is a degree candidate and did use the funds to pay for tuition, fees, books, room, board. So some of the scholarship was used to pay for expenses that I read in TTB not to be qualified (room, board).Comment
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Tuition
You can offset the scholorship money against tution, mandateed fees, books, supplies not againsit room and board. Whatever you can't offset is income to the recepient of the scholarship on line 7 of Form 1040.Comment
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