Tax Exempt Grants and Scholarships
Any non-taxable Pell Grants, scholarships, insurance contract reimbursement, Veterans' Educational Assistance, or tax-free employer-provided educational assistance will reduce the amount of tuition that is eligible for an education credit.
However, any scholarship or grant that is reported as income on a Form W-2 or is taxable income does NOT reduce the amount of tuition that is eligible for an education credit.
For example, if you have scholarship or grant income that is included on a Form W-2 because you do lab research or some other type of work as part of the scholarship or grant received, then you would NOT reduce your tuition that is eligible for an education credit by that type of scholarship or grant received.
However, any scholarship or grant that is reported as income on a Form W-2 or is taxable income does NOT reduce the amount of tuition that is eligible for an education credit.
For example, if you have scholarship or grant income that is included on a Form W-2 because you do lab research or some other type of work as part of the scholarship or grant received, then you would NOT reduce your tuition that is eligible for an education credit by that type of scholarship or grant received.
