Scholarships, grants, fellowships, and stipends (but not loan funds) are taxable income to the recipient, except for the portion of these funds used for tuition, registration, and other university fees, or books, supplies, and equipment required for the courses being taken. Special tax regulations also apply to nonresident alien students and may require withholding of taxes at the time of aid disbursements to these individuals. Information on the taxability of scholarships can be obtained from the following Internal Revenue Service (IRS) publications and forms:
- Publication 519—U.S. Tax Guide for Aliens
- Publication 970—Tax Benefits for Education
- Form 1040EZ and Instructions—Income Tax Return for Single and Joint Filers With No Dependents and
- Form 1040NR and Instructions—U.S. Nonresident Alien Income Tax Return.
The links above refer directly to the IRS Web site at www.irs.gov.