Foreign-Source Scholarship- Taxable in US or not

Forum|Forum|5 years ago
January 7, 2021
1 reply
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Hi,

I am an F1 student, but filing jointly with my wife (US citizen) so am considered a RA for US tax purposes for the 2020 year. I attended grad school in the US from 2019-2020. I received a scholarship from the UK (where I am originally from) for roughly $5000. The scholarship was general (not specified for qualified or non-qualified expenses), but the value was far less than the tuition of over $50,000. The scholarship money arrived late and I had to pay out of pocket since the tuition fees were due in December 2019 (for the February-May semester). Since the scholarship is less than the tuition amount, is it considered tax free? Or will the fact that it was paid to me in the calendar year after the tuition was actually paid, mean it is considered taxable income?

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Hal_Al

Employee

The Scholarship is tax free since it was used for qualified expenses (2020 tuition). Although the general rule is that the calendar years must match, the fact that the scholarship reimbursed you for pre-paying 2020 tuition meets that requirement.