Here you will find general information about the tax treatment of various types of educational assistance you may receive while attending UC Merced. Many types of educational assistance are tax free if they meet certain requirements.
Tax Guidance on Scholarships and Fellowships received by UC Merced Students
A scholarship is an amount paid to or for the benefit of a student at an educational institution to aid in the pursuit of studies. A fellowship is an amount paid for the benefit of an individual to aid in the pursuit or study or research.
Taxation of Scholarships & Fellowships
Scholarship or fellowship payments may be taxable, dependent upon whether the payments are classified as qualified or nonqualified under Internal Revenue Services guidelines.
Scholarship and fellowship amounts are nontaxable (qualified) when:
- The recipient is a candidate for a degree; and
- The scholarship or fellowship amount is used for "qualified tuition and related expenses." These expenses include tuition and fees required for enrollment and fees, books, supplies, and equipment required for courses of instruction.
Scholarship or fellowship amounts are taxable (nonqualified) when:
- Amounts are used for room, board, travel, equipment, incidental living expenses, and other expenses not required as part of their education;
- Amounts are given to non-degree candidates, such as post docs.
Tax withholding and reporting differ depending on your citizenship or resident status.