Does Scholarship Income Need to Be Declared on My US Tax Return?

Yes—scholarship income may need to be reported on your US tax return, even if it’s tax-free in your host country.

As a US citizen or Green Card holder, you are taxed on your worldwide income, including scholarships and grants. While some scholarship income is excluded from taxation, others are fully or partially taxable, depending on how the funds are used and the terms of your award.

What Scholarship Income Is Taxable in the US?

Tax-free if used for:

• Tuition
• Required fees
• Books, supplies, and equipment for courses at an eligible educational institution

Taxable if used for:

• Room and board
• Travel or research not required by coursework
• Stipends, living expenses, or optional expenses
• Teaching or research assistantships (often considered compensation)

What About Foreign Scholarships?

Even if your scholarship income is not taxed in your country of residence, it may still be taxable in the US. Most tax treaties include a clause (known as a “saving clause”) that limits treaty benefits for US citizens, meaning the exemption provided by a treaty may not apply.

What Should You Do?

• Report all scholarship income in your Greenback questionnaire
• Include documentation showing how the funds were used
• Your Greenback accountant will determine what portion, if any, is taxable and how it should be reported

Learn more about reporting foreign income

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