Your Terry Award and the IRS

Under current tax law, certain portions of grants and scholarships may be taxable as income.  All recipients of Terry Scholar awards can obtain Internal Revenue Service Publication 970 or its equivalent each year to determine if they need to include any part of their award as taxable income.   You can obtain this publication via the internet (www.irs.gov) or by calling the IRS toll-free publications request line at 800.829.3676.  Briefly, it is our understanding that the law provides that any portion of the total grants and scholarships you receive that is not used for tuition, fees, and required supplies is taxable as income.  Publication 970 contains worksheets that will help you determine the potential taxability of any part of your financial aid.

Throughout the year, you may wish to save receipts from all tuition and fee billings from your university, along with receipts for all supplies that are required and therefore deductible.  Supplies that are not required by an instructor may not be considered deductible; neither are room and board expenses.  You certainly may use your scholarship money for these expenses, but you may want to remember that this portion may be considered income (for tax purposes).