Internal Revenue Service Says Emergency Student Aid Is Not Income
Last week, the Internal Revenue Service (IRS) published
on its website a series of Frequently Asked Questions about the emergency financial
aid that the Department of Education is dispersing to students and institutions.
Some have asked whether the aid provided to students in response to the COVID-19
pandemic might be considered as income for federal tax purposes, since the aid
was intended to compensate for things other than tuition. Below is the IRS response to that question found in the FAQ:
“Emergency financial aid grants under the CARES Act for unexpected expenses,
unmet financial need, or expenses related to the disruption of campus operations
on account of the COVID-19 pandemic, such as unexpected expenses for food, housing,
course materials, technology, health care, or childcare, are qualified disaster
relief payments under section 139 of the Internal Revenue Code. This grant is
not includible in your gross income.”