Question

What portion of a scholarship is taxable to a degree candidate at an eligible institution?

Answer 1

Your scholarship or fellowship is tax-free if you are a full-time or part-time candidate for a degree at an eligible educational institution. This can be a primary, secondary or post-secondary school. But there are very definite limits on what the award can be used for and still be tax-free. Your scholarship or fellowship can be considered non-taxable if it was used only for tuition, fees, books, supplies and equipment that are all required for your courses.

If any part of your award was used for room and board, travel, research, clerical help or equipment, that portion is taxable. So if your scholarship covers tuition as well as room and board, the amount spent on room and board is considered taxable; the amount spent on tuition is not.