Are scholarships taxable in New Jersey?

Forum|Forum|6 years ago
June 6, 2019
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Best answer by SweetieJean

Scholarships and Fellowship Grants are taxable unless they meet all of the following conditions:

1. The primary purpose of the grant is to further the recipient’s education or training; and

2. The grant does not represent payments for past, present, or future services or payments for services that are subject to the direction or supervision of the grantor (e.g., a fellowship given in exchange for teaching); and

3. The grant is not for the benefit of the grantor.

http://www.state.nj.us/treasury/taxation/pdf/current/1040i.pdf at page 26.

SweetieJeanAnswer

Employee

Scholarships and Fellowship Grants are taxable unless they meet all of the following conditions:

1. The primary purpose of the grant is to further the recipient’s education or training; and

3. The grant is not for the benefit of the grantor.

http://www.state.nj.us/treasury/taxation/pdf/current/1040i.pdf at page 26.

brerabbit1

So does that mean I simply don't report what falls within those guidelines?

PSP

what does this mean?

"The primary purpose of the grant is to further the recipient's education or training."

My son received a scholarship that is enough to cover tuition and room and board, is that latter part taxable?

CatinaT1

It sounds like it is non-taxable then. What are you referring to when you say 'is the latter part taxable?'

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PSP

Thanks for replying.

For example, my child received a scholarship from a NJ state university that is enough to cover all IRS qualified ed expenses ( i.e., tuition, fees, books, etc.) as well as sufficient to cover room and board. The IRS says the amount not considered a qualified expense (e.g., the amount used for room and board) is taxable. Does NJ do the same (i.e., part would be taxable) or since it is one scholarship only given so he would attend the school for educational purposes, is it all tax exempt?

JotikaT2

Yes.

New Jersey does not taxable scholarship income if it was used for education. Any other amounts are taxable, including amounts paid for room and board.

See the excerpt from New Jersey below.

Scholarship income for New Jersey purposes