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5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 8815 Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989 8863 Education Credits 8917 Tuition and Fees Deduction See chapter 12 for information about getting these publi- cations and forms. 1. Scholarships, Fellowship Grants, Grants, and Tuition Reductions What’s New Individual retirement arrangements (IRAs). You can set up and make contributions to an IRA if you receive tax- able compensation. A scholarship or fellowship grant is generally taxable compensation only if it is shown in box 1 of your Form W-2, Wage and Tax Statement. However, for tax years beginning after 2019, certain non-tuition fel- lowship and stipend payments not reported to you on Form W-2 are treated as taxable compensation for IRA purposes. These include amounts paid to you to aid you in the pursuit of graduate or postdoctoral study and included in your gross income under the rules discussed in this chapter. Taxable amounts not reported to you on Form W-2 are generally included in gross income as discussed later under Reporting Scholarships and Fellowship Grants. For more information about IRAs, see Pub. 590-A and Pub. 590-B. Higher education emergency grants. Emergency fi- nancial aid grants under the following are not included in your gross income. • The CARES Act. • The Coronavirus Response and Relief Supplemental Appropriations Act, 2021. • The American Rescue Plan Act of 2021. Also, for purposes of the American opportunity tax credit (see chapter 2) and lifetime learning credit (see chapter 3), a student does not reduce an amount of quali- fied tuition and related expenses by the amount of an emergency financial aid grant. For more information, see 5329 8815 8863 8917 Higher Education Emergency Grants Frequently Asked Questions. Introduction This chapter discusses the income tax treatment of vari- ous types of educational assistance you may receive if you are studying, teaching, or researching in the United States. The educational assistance can be for a primary or secondary school, a college or university, or a vocational school. Included are discussions of: • Scholarships; • Fellowship grants; • Need-based education grants, such as a Pell grant; and • Qualified tuition reductions. Many types of educational assistance are tax free if they meet the requirements discussed here. Special rules apply to U.S. citizens and resident aliens who have received scholarships or fellowship grants for studying, teaching, or researching abroad. For information about these rules, see Pub. 54, Tax Guide for U.S. Citi- zens and Resident Aliens Abroad. Scholarships and Fellowship Grants A scholarship is generally an amount paid or allowed to, or for the benefit of, a student (whether an undergraduate or a graduate) at an educational institution to aid in the pursuit of his or her studies. A fellowship grant is generally an amount paid for the benefit of an individual to aid in the pursuit of study or re- search. Amount of scholarship or fellowship grant. The amount of a scholarship or fellowship grant includes the following. • The value of contributed services and accommoda- tions. This includes such services and accommoda- tions as room (lodging), board (meals), laundry serv- ice, and similar services or accommodations that are received by an individual as a part of a scholarship or fellowship grant. • The amount of tuition, matriculation, and other fees that are paid for or remitted to the student to aid the student in pursuing study or research. • Any amount received in the nature of a family allow- ance as a part of a scholarship or fellowship grant. Chapter 1 Scholarships, Fellowship Grants, Grants, and Tuition Reductions Page 5