Do I Have to Put My Pell Grant on My Tax Return?
Paying for college can be expensive. If you have a low income, the costs can be almost insurmountable. The Pell Grant is a federal program that provides college money to people the government classifies as low-income. If you qualify for a Pell Grant, the money you receive can help offset some of your education costs. Pell Grant money is considered student aid, which is not taxable.
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Pell Grant Basics
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The Pell Grant is a need-based program. Unlike a student loan, you do not need to pay back money you receive from the Pell Grant program after you graduate. At the time of this publication, the maximum Pell Grant you can receive is $5,500 per academic year. The amount you actually receive, however, depends on how much you qualify for, if any.
Tax Filing
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If the only money you received over the past year came from the federal Pell Grant program or in the form of other student aid, such as student loans, you do not need to file a tax return for the year. If you earned other income that is taxable requiring you to file an income tax return, you do not need to include Pell Grant money you received on your return.
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Educational Use
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Pell Grant money can only be used for education and related educational costs. This includes tuition and student fees, as well as other related expenses. In most cases, your Pell Grant money will be sent directly to your school, which will deduct tuition and student fees. If money is left over, they will send you a check. You can use money from this check to pay for qualified educational expenses.
Qualified Expenses
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The U.S. Federal Student Aid program has a fairly liberal definition of other related expenses. As long as you are attending school at least half-time, you can use your Pell Grant money to pay for the cost of transportation to and from school, room and board as well as the cost of books and supplies, according to the Federal Student Aid site.
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