FAFSA 2025-2026: Do I report UA competitive scholarship as income on IRS question?

The answer depends on how your scholarship was used. If the scholarship money was used ONLY for qualified educational expenses (tuition, required fees, books, supplies), then it's not considered taxable income and you would enter $0 for that question. But if any portion went toward room and board, travel, or other non-qualified expenses, that portion should have been reported as income on your taxes, and you'd need to include that amount on the FAFSA.

omg i had the EXACT same question last week!! so confusing right?? i just asked my parents and they said we didn't report any of my scholarships on taxes so i put 0

To check if the scholarship was reported as income, look at your 2023 tax return. If it was reported, it would appear on Schedule 1 of your 1040 form on the line for "Other income." There might also be a statement attached that breaks down what that "other income" includes. You can also check your W-2 form from the university if they issued one. Some schools include taxable scholarship amounts on a W-2. If your scholarship only covered tuition and required fees, then it most likely wasn't taxable and wouldn't be included in your tax return at all.

The financial aid system is SO BROKEN! I had this exact same issue and got flagged for verification because I answered wrong. Then I had to spend WEEKS trying to fix it. The FAFSA people expect us to be tax experts but give zero guidance. And don't even get me started on trying to reach someone at Federal Student Aid for help - I spent hours on hold only to get disconnected FOUR TIMES!

My daughter got a similar scholarship last year and we didn't have to report it as income because it went straight to tuition. Check your 1098-T form from the university - it should show your scholarship and your qualified expenses. If scholarship < qualified expenses, you're good to put $0.

wait i'm confused now... i got pell grants and put 0 on that question. should i have reported them?? is this gonna mess up my whole application??

Just to add some clarity to this discussion: The determining factor for whether scholarships/grants count as income is HOW the money was used, not the type of scholarship. Even merit-based scholarships can be taxable if used for non-qualified expenses. Qualified expenses = tuition, fees, books, supplies required for courses Non-qualified = room, board, transportation, personal expenses If scholarship money went to non-qualified expenses, that portion should have been reported on your tax return, and that's the amount you'd put on the FAFSA question about "scholarships reported as income.

When I was doing my daughter's FAFSA last month we actually called the financial aid office at her school and they were really helpful with this exact question. Might be worth a quick call to UA's financial aid office.

my roommate says i should have reported my scholarships as income and now im freaking out that i did my taxes wrong last year!!! does anyone know if we can get in trouble for this???

UPDATE: I looked through the 2025-2026 FAFSA Help text for this specific question, and it clarifies: "Enter the amount of any college grants, scholarships or AmeriCorps benefits (awards, living allowances, and interest accrual payments) that were reported as income on your 2023 tax return." The key phrase is "that were reported" - you're not answering whether they SHOULD have been reported, just whether they WERE reported. So check your actual tax return to answer this question accurately.