The Internal Revenue Service (IRS) in a notice posted this week made clear that emergency financial aid grants received by students due to the coronavirus pandemic will not be counted as taxable income. This applies to any grant a student receives from a federal agency, state, Indian tribe, higher education institution, or scholarship-granting organization.
Additionally, if a student used a portion of their emergency aid grant for qualified tuition and related expenses in 2020, they may be eligible to claim a tuition and fees deduction or receive the American Opportunity Credit or Lifetime Learning Credit on their tax return, according to the IRS.
Institutions also won’t be required to send additional tax forms to the students or to the IRS to report these grants due to the fact the funds won’t be included in taxable income, the IRS added.
Publication Date: 4/1/2021
Annual Business Meeting & Policy Update: Spring 2024: Annual Business Meeting & Policy Update: Spring 2024
Policy Update: FAFSA Simplification
The Supreme Court Speaks: Understanding the Implications of Race-Conscious Admission Decision
OTC AskRegs Experts: Deep Dive on Proposed GE Regs and Removal of Housing Question on FAFSA
OTC Inside the Beltway: Wrapping Up the Debt Ceiling and the Latest on Student Loan Debt Cancellation
House Passes Bipartisan Debt Ceiling Deal That Would End Student Loan Payment Pause
NASFAA Annual Business Meeting and Policy Update: May 2023
OTC AskRegs Experts: Federal Work-Study and Murky COVID Flexibility
Off the Cuff - Episode 263 Transcript
OTC Inside the Beltway: The Debt Ceiling
Coronavirus (COVID-19) Web Center
Brief: SAP Requirements Create Barriers to Underserved Students
OTC From the Field: A Conversation on Higher Education Policymaking With Rep. Bobby Scott
Cardona Urges Higher Education Leaders to ‘Fight Complacency’ in Year Ahead
Today's News for April 17, 2023
OTC Inside the Beltway: Working Through the FAFSA Roadmap and the White House Budget Request
Warren Calls For More Higher Education Oversight, Accountability
Today's News for March 29, 2023
ED Releases 2024-25 Draft FAFSA for Public Comment
House Subcommittee Hearing Takes Aim at Biden’s Student Loan Cancellation Plan
Today's News for March 24, 2023
Today's News for March 22, 2023
ED: GOP’s Proposed Budget Cuts Would Have ‘Damaging’ Impact for Students, Economy
FSA Announces Date Range, Road Map for 2024-25 FAFSA Launch
Today's News for March 21, 2023
OTC From the Field: Making Sense of Accountability Metrics in Higher Ed
Experts Discuss How to Protect Higher Ed Funding During Recessions
Today's News for March 16, 2023
NASFAA Members Advocate for Pell Grant Investments, Share Concerns with FAFSA Simplification Implementation on Capitol Hill
Today's News for March 14, 2023
OTC AskRegs Experts: FAFSA Simplification Surveys and Making Sense of Payment Periods
Biden’s 2024 Budget Proposal Doubles Down on Funding for Pell Grants, Free Community College, and Federal Student Aid Administration
CFPB Discovers Illegal Junk Fees on Student Loans
Free College: A Three-Part Series
Testimony Before Congress or Presentations to Hill Staff
Consumer Financial Protection Bureau (CFPB) or Advisory Committee Issues
Department of Education Regulatory or Process Issues or Other Executive Branch Departments
David S | 4/1/2021 3:12:09 PM
A lot of us had emergency aid programs in place pre-COVID, and while the pandemic certainly increased the volume of requests and funds awarded, not all emergency aid is COVID-related, regardless of when it was awarded. Student's laptop dies and has to be replaced...not a COVID thing. Does anyone think that the IRS is going to dig so deep as to look into whether or not schools differentiate between COVID-related and non COVID-related emergency aid?
I sure hope I'm overthinking this. Given that the US Treasury acknowledges that it will lose $7.5 trillion - with a tr - over the next decade thanks to underreported income, I hope the IRS isn't losing sleep over the taxability of a student's $1000 emergency grant.
You must be logged in to comment on this page.