I’ve heard about Trump trying to tax scholarships. How exactly would that work? How likely is it to happen? What do you all think about this?
Scholarships are already taxable if not used for tuition or paid directly to the university. According to the IRS, only tuition, books, and fees are considered educational expenses. Room, board, and travel are NOT considered educational expenses.
@Wolf
That’s not the main point here. Scholarships and grants aren’t taxed when they go toward tuition and related costs. If these scholarships were taxed, it could make college unaffordable for many. And that’s what the GOP seems to want—keep the wealthy on top while making it harder for the working and middle class to access higher education. It’s a pretty damaging move.
Scholarships can already be taxable if used for expenses that aren’t directly related to school activities—like food, clothes, housing, and transportation. Those would count as taxable income.
Shane said:
Scholarships can already be taxable if used for expenses that aren’t directly related to school activities—like food, clothes, housing, and transportation. Those would count as taxable income.
You’re missing the point here completely. The proposal being talked about is taxing scholarships and grants used for actual tuition and other educational costs. Right now, no one has to pay taxes on scholarships used for tuition, but if this policy goes through, it could change things drastically. There would definitely be a lot of pushback, but it depends on how hard the GOP is pushing for their tax cuts and how they decide to fund them (which usually means just adding to the national debt).