{"id":20717,"date":"2017-06-14T12:00:00","date_gmt":"2017-06-14T12:00:00","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/"},"modified":"2023-08-29T08:34:53","modified_gmt":"2023-08-29T13:34:53","slug":"college-financial-aid","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/lifestyle\/education\/college-financial-aid\/","title":{"rendered":"Reporting College Financial Aid"},"content":{"rendered":"<p>If you apply for financial aid, you might need to provide a copy of your federal return. You\u2019ll use Form 4506 to ask the IRS to send a copy of your return to a third party if you filed:<\/p>\n<ul>\n<li>Form 1040<\/li>\n<li>Form 1040A<\/li>\n<li>Form 1040EZ<\/li>\n<\/ul>\n<p>If you&#8217;re asked only for IRS verification of your income, use Form 4506-T or Form 4506T-EZ.<\/p>\n<p><strong>Types of financial aid<\/strong><\/p>\n<p><strong>Scholarships<\/strong> &#8212; Scholarships include amounts paid for:<\/p>\n<ul>\n<li>Academic abilities<\/li>\n<li>Athletic abilities<\/li>\n<li>Musical abilities<\/li>\n<li>Other abilities<\/li>\n<\/ul>\n<p>If you&#8217;re a degree candidate, you\u2019ll only pay tax on the part of a scholarship you used to pay for things other than tuition and required fees. Required fees are items required for all students in a particular program.<\/p>\n<p>Scholarship amounts used for these are taxable:<\/p>\n<ul>\n<li>Room and board<\/li>\n<li>Travel<\/li>\n<li>Research<\/li>\n<li>Clerical help<\/li>\n<li>Equipment &#8212; unless required of all students in the course<\/li>\n<\/ul>\n<p><strong>Grants<\/strong> &#8212; These are treated like scholarships and are tax-free if used to pay for qualifying expenses:<\/p>\n<ul>\n<li>Pell Grants<\/li>\n<li>Supplemental Educational Opportunity Grants<\/li>\n<li>Grants to states for state student incentives<\/li>\n<\/ul>\n<p>If you use money from these grants for travel to and from school, it\u2019s taxable.<\/p>\n<p>Payments are tax-free for these items received under Department of Veterans Affairs (VA) administered laws:<\/p>\n<ul>\n<li>Education<\/li>\n<li>Training<\/li>\n<li>Subsistence<\/li>\n<\/ul>\n<p><strong>Fulbright grants<\/strong> &#8212; These grants might be awarded for study, research, or teaching abroad. They\u2019re usually treated like any other scholarships in figuring how much of the grant is tax-free.<\/p>\n<p><strong>Reporting financial aid <\/strong>&#8212; Don&#8217;t report nontaxable scholarship amounts on your return. Include taxable amounts with wages &#8212; even if the scholarship amounts aren&#8217;t shown on a W-2. To report the aid:<\/p>\n<ul>\n<li>On Form 1040EZ &#8212; Include the taxable amount on Line 1. If the income wasn\u2019t reported on a W-2, print \u201cSCH\u201d and the taxable amount in the space to the left of Line 1.<\/li>\n<li>On Form 1040 or 1040A &#8212; Include the taxable amount on Line 7. If the income wasn\u2019t reported on a W-2, print \u201cSCH\u201d and the taxable amount on the dotted line next to Line 7.<\/li>\n<\/ul>\n<p><strong>Higher education benefits<\/strong> &#8212; The government offers these benefits for those attending a higher-learning institution; you can only claim one of them in a given year:<\/p>\n<ul>\n<li>American Opportunity Credit &#8212; For 2009 to 2017, you can claim this credit for the first four years of college. You must be enrolled in at least half of a full-time load in a degree program.<\/li>\n<li>Lifetime Learning Credit &#8212; You can claim this credit for any number of years. This credit applies to the family as a whole, not on a per-student basis. These aren\u2019t factors for eligibility:\n<ul>\n<li>Number of hours you&#8217;re enrolled<\/li>\n<li>Enrollment in a degree program<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>State taxes<\/strong><\/p>\n<p>Attending school in a state that\u2019s not your home state isn&#8217;t considered a permanent address change. If you&#8217;re attending college out of state, you&#8217;ll still file taxes with your home state.<\/p>\n<p>However, you&#8217;ll file a return in both states if either of these applies:<\/p>\n<ul>\n<li>You earn income in the state where you attend college.<\/li>\n<li>You\u2019re considered to be a statutory resident of the state where you attend college.<\/li>\n<\/ul>\n<p>To learn more, see the Education tax tips.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you apply for financial aid, you might need to provide a copy of your federal return. You\u2019ll use Form 4506 to ask the IRS to send a copy of your return to a third party if you filed: Form 1040 Form 1040A Form 1040EZ If you&#8217;re asked only for IRS verification of your income, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26,61],"tags":[],"class_list":["post-20717","post","type-post","status-publish","format-standard","hentry","category-lifestyle","category-education"],"acf":[],"yoast_head":"<title>Reporting College Financial Aid | H&amp;R Block<\/title>\n<meta name=\"description\" content=\"How does college financial aid affect your tax return? 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