What this line means
The taxable portion of scholarship or fellowship grants that was not reported on a Form W-2. Scholarship money used for tuition, fees, books, supplies, and equipment required for enrollment is tax-free. Money used for room, board, travel, or other living expenses is taxable income. If your university reported the taxable portion on a W-2, it is already included in your wages and does not go here.
Does this apply to you?
- You received a scholarship or fellowship that covered more than tuition and required fees
- You used scholarship money for room, board, travel, or personal expenses
- You received a stipend for research or teaching that was not reported on a W-2
- You received a fellowship grant for living expenses while pursuing graduate study
Easy to overlook
Room and board paid by scholarships is taxable income Many students assume their entire scholarship is tax-free. It is not. Only the portion used for qualified education expenses — tuition, enrollment fees, and required books and supplies — is excludable. 1 If your scholarship covered $20,000 in tuition and $10,000 in room and board, the $10,000 for room and board is taxable income reported here. Your university’s financial aid letter does not always make this distinction clear. General filing pattern — room and board scholarship amounts unreported
Scholarship recipients with no W-2 often owe tax they did not expect Graduate students receiving fellowship stipends for living expenses frequently have no employer, no W-2, and no tax withholding. The full stipend is taxable, but no one withholds tax on it. 2 These students owe the full income tax when they file, and they owe an underpayment penalty if they did not make estimated tax payments during the year. IRS Publication 970 — Tax Benefits for Education
Watch out for this
Double-reporting scholarship income that already appears on a W-2. If your university treated you as an employee (teaching assistants, research assistants) and issued a W-2, that income is already on Form 1040 line 1a. Entering it again here on line 8r double-counts the income. Line 8r is only for taxable scholarship amounts not reported on a W-2.
Footnotes
-
IRS Publication 970, Tax Benefits for Education, Scholarships and Fellowships. https://www.irs.gov/pub/irs-pdf/p970.pdf ↩
-
IRS Publication 970, Tax Benefits for Education, Taxable Scholarships. https://www.irs.gov/pub/irs-pdf/p970.pdf ↩