August 20, 2020 There's good news if you received an emergency financial aid grant from your school because you were financially impacted by the coronavirus (COVID-19) pandemic. The grant is tax-free to you! Do not include it in income on your 2020 tax return. Since the grant is tax-free, grant funds you use to pay for educational expenses cannot be used to claim the American opportunity tax credit, lifetime learning credit or the tuition and fees deduction on your tax return. For more information, please see Publication 970, Tax Benefits for Education.
