Internal Revenue Service code provides that only “qualified scholarships” may be excluded from income.  Qualified scholarship expenditures generally cover tuition, fees, books, and supplies or equipment required for a course of instruction.  Some scholarship expenditures do not qualify and may not be excluded from a recipient’s gross income.  Recipients are advised to check with the IRS or a qualified tax preparer before excluding any scholarship amounts from gross income.

Check out the following web site for detailed information about the new tax benefits for education.  Hope Scholarship and Lifelong Learning Credit:  www.ed.gov/inits/hope