How Does A Pell Grant Affect My Taxes?

Any portion of your Pell grant that is not spent on qualified education expenses is required to be reported as income on your tax return.

If you use your Pell grant to pay for room and board charges, or to travel to your permanent home on weekends or holidays, then the amount will be considered taxable income.

Do you get leftover Pell Grant money?

However, if you receive other financial aid such as scholarships or loans, you may have money leftover after all your school costs have been paid. Since Pell funds go directly to the college or university you attend, the school would refund any remaining money to you.

Are grants taxable income?

If your scholarship or grant was for study or research in the pursuit of a degree, the money used to pay your qualified tuition and related expenses isn’t taxable. However, scholarship or grant income is taxable if: The grantor requires you to perform services in return for granting the scholarship or grant.

Do you have to pay taxes on financial aid refunds?

However, you must report any refund money that you use on housing, food and personal expenses as part of your taxable income. Note that if you’re receiving student financial aid but you’re not eligible for a degree, the total amount of your grants, scholarships and fellowships is taxable.

How does a Pell grant work?

Pell Grants are awarded to undergraduate students based on need; the amount of money a student can receive is directly related to the student’s financial status, the number of classes a student is enrolled in and the costs of the school he or she attends.