Only scholarship amounts used to pay for only tuition and required fees are non-taxable. However, scholarship amounts used for room and board, travel, research, and equipment are taxable. In other words, if you received scholarships and/or grants in excess of the cost of tuition and fees, you’ll have to pay taxes on the amount that exceeded tuition and fees. If you fall into this category, you can expect to receive a 1098-T form from the cashiers office.
Monterey Institute Grants, Pell Grants, and Supplemental Educational Opportunity Grants (SEOG) are treated like scholarships and are tax-free if they are used to pay for qualifying tuition expenses. Money from these sources that is used for travel to and from school is taxable.
VA Benefits Payments
Any Veterans Benefits that you receive for education or training that are administered by the Department of Veterans Affair are tax-free.