Nancy in NH Posted August 27, 2017 Share Posted August 27, 2017 DS has been awarded two scholarships (not awarded by his school). The first award has sent him a check for 1/2 the amount this past week. The other 1/2 will be sent in November. The letter does not stipulate it is to be split between fall/spring semesters, but that seems pretty much implied. The other scholarship was sent in full and applied already to his student account. The school gave him the option to split the amount however he would like (it will be split about 50/50 over the two terms but not exactly, since the scholarship did not have any specific stipulations). In addition, he was awarded a Pell grant, which of course, is split over the two semesters. Are they considered taxable in the year that they are awarded or in the year in which they are applied towards the student's tuition? The two awards will be sent to him in full during this tax year, but about 1/2 of the awards will credited towards tuition for the spring 2018 term. Tuition is due for the spring term on Jan 2, so I could put off paying until 2018. It seems that would complicate matters, but I'm not really sure. Do I just keep track of when the amounts are awarded and when we pay tuition and just include them in the years in which those things occurred? In other words, if we pay the tuition bill in December and have the scholarships applied this year (even if part is for the spring), it will all be considered as occurring in 2017 for tax purposes? I do not know yet how the school will report on the 1098-T (box 1 - payments received or box 2 - amounts billed).I just want to be sure I'm keeping track of them in the proper tax year and wondering if it matters whether we pay for the spring this year or next. Now that I type that, I suppose if matters very much how the school reports on the 1098-T, am I right? Ugh! I've read previous threads regarding scholarships and taxes, but I haven't seen any addressing this question. Maybe because I'm just not tax savvy and it's there and I'm not getting it. Can someone explain this to me? Quote Link to comment Share on other sites More sharing options...
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