$2,000 tax deduction for purchase of hybrid powered cars - information from Brookwood Tax Service

This page last updated on
December 20, 2004

Tax Break for Academic Scholarships and Fellowships
Educational Assistance Amounts Are Tax-Free Under Certain Conditions

Qualified scholarships and fellowships are treated as tax-free amounts if all of the following conditions are met:

	The taxpayer is a candidate for a degree at an educational institution;
	The amounts received as a scholarship or fellowship are used for tuition and fees required for enrollment or attendance at the educational institution, or for books, supplies, and equipment required for courses of instruction; and
	The amounts received are not a payment for services.

Any scholarship amount specifically designated as NOT being for tuition and fees, such as a an amount for "room and board" or "meal allowance," considered taxable income and must be reported on the recipient's tax return.

Payments for teaching and research, such as graduate research fellowships or graduate teaching fellowships are generally considered earned income for services rendered and must be reported as taxable wage or salary income on the recipient's tax return. The educational institution normally will issue a Form W-2 for such payments.

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Tax Break for Academic Scholarships and Fellowships Educational Assistance Amounts Are Tax-Free Under Certain Conditions

Tax Break for Academic Scholarships and Fellowships
Educational Assistance Amounts Are Tax-Free Under Certain Conditions