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Questions 44D (student) and 93D (parent) on the FAFSA refer to the portion of the scholarships or grants you or your parent reported to the IRS in your or your parents' adjusted gross income. These scholarships and grants include college institutional grants and scholarships, federal grants, outside scholarships, and state grants. They also include AmeriCorps benefits (awards, living allowances and interest accrual payments) as well as grant and scholarship portions of fellowships and assistantships. Please refer to IRS publication 970 and consult with a tax professional to determine if you have any taxable grants or scholarships.
The portion of a scholarship that is used for paying tuition, fees (not including room and board), books, supplies, and equipment required for course-related instruction, for individuals who are candidates for a degree at a college or university, is excluded from the recipient's federal taxable income. All other scholarship amounts, including amounts used to pay non-qualified expenses such as room and board, are included in the calculation of the recipient's federal taxable income. This amount is referred to as taxable grants and scholarships.
For example: Fran receives a total of $48,500 in grants and scholarships ($40,500 from Hampshire College, $5000 from federal sources, $1500 from state sources, and $1500 from a local scholarship foundation). Total tuition, fees (not including room and board charges), books, and supplies amount to $46,250 for the year. This leaves Fran with $2250 for non-qualified expenses, such as room and board. If Fran is required to file a U.S. individual Income Tax Return (IRS Form 1040, 1040A, or 1040EZ) Fran would report $2250 as taxable income under "wages, salaries, tips, etc." on the tax return. Fran would then enter this amount on her FAFSA under the Taxable Grants and Scholarships question.
If we are asking you to complete a Taxable Grant Review as part of your financial aid application, we are asking you to review your responses to these questions on the FAFSA to confirm the reported amounts. Most students and parents do not have taxable grants and scholarships, so we are asking you to review your responses so your information is accurate. After reviewing your responses, please confirm the amounts listed by sending an email to us at firstname.lastname@example.org. If an amount is incorrectly reported, please make a correction to the FAFSA and notify us by email that a correction was made.
You may find specific tax information on the IRS website at www.irs.gov, including IRS Publication 970 (Tax Benefits for Education), IRS Publication 929 (Tax Rules for Children and Dependents), and the Instructions to Form 1040, Form 1040A, and Form 1040-EZ.