schools - Linkenheimer LLP CPAs & Advisors

Are Scholarships Tax-Free Or Taxable?

COVID-19 is changing the landscape for many schools this fall. But many children and young adults are going back, even if it’s just for online learning, and some parents will be facing tuition bills. If your child has been awarded a scholarship, that’s cause for celebration! But be aware that there may be tax implications.

Scholarships (and fellowships) are generally tax-free for students at elementary, middle and high schools, as well as those attending college, graduate school or accredited vocational schools. It doesn’t matter if the scholarship makes a direct payment to the individual or reduces tuition.

Tuition and related expenses

However, for a scholarship to be tax-free, certain conditions must be satisfied. A scholarship is tax-free only to the extent it’s used to pay for:

Tuition and fees required to attend the school and
Fees, books, supplies and equipment required of all students in a particular course.

For example, if a computer is recommended but not required, buying one wouldn’t qualify. Other expenses that don’t qualify include the cost of room and board, […]

Linkenheimer Partners with Social Advocates for Youth for a Day of Job Shadowing

Last month, Linkenheimer participated in inspiring six Elsie Allen High School Juniors and opened their eyes to the wonderful world of accounting. A group of eight Linkenheimer employees spent half a day with the students and their advisors to explain and demonstrate what exactly accountants do. We provided them with explanations and examples of the different types of accounting professions out there including public accounting vs private accounting and tax vs audit; as well as sharing with the students our firm’s background and how import our culture is within the firm. We explained that all of us working together in the firm, spending so much time together, we strive to meet our value words of Team, Care, and Approachable to provide a better experience for our staff and our clients. It was a very enjoyable experience inspiring such a great group of kids and assisting in broadening their views to now include an accounting career as one of their many career options as they head into the world. This is the third time this year Linkenheimer has partnered with the nonprofit, Social Advocates for Youth (SAY), to host groups of high […]