Are Trade Act paid Tuition and School expenses taxable?

Forum|Forum|4 years ago
February 28, 2022
2 replies
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I was laid off and qualified for Trade Act. I had less than a year of school left to finish my BS so I went back to school. I received my unemployment earnings (1099-G) and a Tuition Statement (1098-T), but nothing else. I paid nothing for finishing my degree through Trade Act, it all came from the government. Are the funds paid to the school on my behalf taxable? Thank you!

TurboTax Home & Biz Windows

Hal_Al

Employee

Q. Are the funds paid to the school on my behalf taxable?

A. No.

But you cannot claim a tuition credit, based on the tuition paid by that tax free assistance.

jnjpatoineAuthor

Thank you!!

ThomasM125

No, the funds paid to the school are not taxable to the extent they are for qualifying education expenses. They should be listed in box 5 on your form 1098-T Tuition Statement. You would only pay tax on your scholarship income if the amount in box 5 was more than your education expenses listed in box 1 of your form 1098-T.

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