The IRS recently issued new education FAQs on how students and higher education institutions should report coronavirus pandemic-related emergency financial aid grants.
Emergency financial aid grants made by certain parties to a student because of a pandemic-related event are not included in the student’s gross income.
Also, students should not reduce the amount of qualified tuition and related expenses by the amount of an emergency financial aid grant.
Because students do not include the grants in their gross income, higher education institutions are not required to file or furnish Forms 1099-MISC reporting the grants, and they do not need to report the grants in Box 5 of Form 1098-T. Learn more.