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ARE GRANTS TAXABLE FOR COLLEGE STUDENTS?

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Possibly.  If they exceed the cost of tuition, books, and supplies, then we can move the meter to definitely.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
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It depends on the grant.

Ironman's answer is not completely accurate. There are grants that are non-taxable, even if they exceed tuition, fees, and books, as long as they are used for other "eligible expenses." For example, some grants are designed to cover living expenses and are still non-taxable. It's rare, but they do happen.

Usually, if the money is in exchange for something, it is taxable. For example, if you get the grant as part of a research grant, or a teaching fellowship, or play some sport for the school, that is going to be considered work. Technically, it should be reported on a W-2, then. (Though there are exceptions to this, too.)