Scholarship Stipend and 529 Plan

mommdc
Wed, 30 Aug 2017 20:18:03 +0000

Not the whole amount of taxable scholarship income will be subject to tax. There would be a standard of around $6,000 deduction that would reduce it, if the student has no ostudent’s income.

For example if the NMF scholarship covers tuition, fees (nontaxable scholarship), then the extra stipends of $3,500 and $2,500 can be used toward travel and other expenses, and could be included in student’s taxable income. So if they total $6,000 and might be reduced by book expenses as well, then no tax might be actually due. The standard deduction was $6,300 for a dependent student.