If you received a scholarship or fellowship, part or all of it may be taxable even if you didn't receive a W-2 form. Generally, the entire amount is taxable if you are not a candidate for a degree. If you are a candidate for a degree, you generally can exclude from income that part of the grant used for (1) tuition and fees required for enrollment or attendance, or (2) fees, books, supplies, and equipment required for your courses. You cannot exclude from income any part of the grant used for other purposes, such as room and board.

Payment for services. All payments you receive for past, present, or future services must be included in income. This is true even if the services are a condition of receiving the grant or are required of all candidates for the degrees are not considered taxable income.

Tax credits can possibly reduce your or your family's federal taxes. They are based on your college tuition and fee charges, minus grants, scholarships, and other tax-free educational assistance.

The Hope Tax Credit can only be used during the first two years of college, and since Rush University programs are either at the graduate level or begin at the junior level for undergraduate, this credit can not be used by Rush students.

The Lifetime Learning Tax Credit is available for any level of postsecondary study up to a current maximum of $1,000. This can only be used by the individual claiming the student on the federal tax return. If you are not claimed as a dependent on anyone's tax return, you would be eligible to claim the credit.

Further information about the Hope and Lifetime Learning Tax Credits can be found at http://www.nasfaa.org/Redesign/TaxBenefitsPSIntro.html.

Rush University will distribute required tax reporting information in January. In future years students may be required to provide additional information, such as the name, address, and social security number of the person eligible to claim the student each year as a tax dependent.

The IRS Web site has a wealth of information about the treatment of scholarships and other student issues. For more information, please visit http://www.irs.gov/faqs/faq4-8.html and click the link to Publication 970.

You should always consult a tax advisor to obtain the most current and accurate tax law and interpretation.

Updated 2/15/2008

The Office of Student Financial Aid
600 South Paulina Street, Suite 440 Chicago, Illinois 60612
Phone: (312) 942-6256
Fax: (312) 942-2732
financial_aid@rush.edu