Friday, December 7, 2012

Scholarship and Education Tax Benefits

§ 117(a) excludes from gross income “any amount received as a qualified scholarship by an individual who is candidate for a degree at a college or university. LIMITED TO TUITION, NO ROOM AND BOARD. Were services a condition to the award?

§ 117(c) Does not apply to “any amount received which represents payment for teaching, research, or other services by the student required as a condition for receiving the qualified scholarship. Certain parts of the grant might be excluded.

§ 177(d) = Qualified tuition reduction, it is like a non-compensatory scholarship. Provided to employees of education institutes for the education of the employee.

Hope Scholarship Credit § 25A(b): Equal to first 100% of the first 2,000, 25% to the second 2,000.  Now called the American Opportunity Credit. Up to $2500 for students

Life time learning credit §25A(c): Up to $2000, 20% of the first 10,000 qualified tuition expenses

More information on the taxation of scholarships and fellowships.

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