Laura Saunders, Wall Street Journal, Is That College Scholarship Taxable? What Parents Need to Know Before Fall (July 24, 2026):
[M]many colleges and universities are required to send Form 1098-T both to students and the IRS. Box 1 has qualified tuition and expenses paid by or on behalf of the student. Box 5 gives the amount of scholarships or grants from the institution to the student and from some third parties.
But there are hitches. Form 1098-T often doesn’t break out whether a portion of the scholarship or related funds are taxable. . . .
In addition, independent providers of scholarships or assistance like stipends aren’t required to issue 1098-T forms. So students and parents are supposed to keep records and report what’s taxable. . . .
If you’re confused by these convoluted rules, don’t panic. [Experts] say they’ve seen almost no IRS enforcement of the tax rules in this area.
Selected IRS resources:
- IRS, Publication 970: Tax Benefits for Education
- IRS, Topic No. 421: Scholarships, Fellowship Grants, and Other Grants
- IRS, About Form 1098-T, Tuition Statement
Related TaxProf Blog coverage:
