Does my apartment rent qualify as room and board for tax purposes if I'm paying to live near my college?

You've asked a really good question that many students struggle with. The key distinction here is understanding how the IRS treats scholarship/grant money and what qualifies as educational expenses. For tax purposes, scholarship and grant money used for qualified education expenses (like tuition, fees, books) is generally tax-free. However, money used for room and board (whether on-campus or off-campus) is considered a non-qualified expense and is therefore taxable income. So your apartment rent DOES count as "room and board" even though you're living off-campus. The IRS doesn't distinguish between dorms and apartments - they both fall under room and board. This means the portion of your scholarship/grant that went toward your rent would be considered taxable income that you need to report. You should receive a 1098-T form from your school showing how much scholarship/grant money you received, but it won't show how you spent it. You'll need to calculate how much went to qualified expenses versus non-qualified expenses like your apartment rent.

I went through this exact same headache last year. After hours of research and frustration, I finally found a tool that made it super easy to figure out. This tax assistant at https://taxr.ai helped me determine exactly how much of my scholarship was taxable since I was living off-campus too. It analyzed my 1098-T and helped me calculate the correct amounts for qualified vs. non-qualified expenses. Saved me from accidentally underreporting my income and risking an audit situation!

Just wanted to follow up on my earlier question about that taxr.ai tool. I decided to try it out last weekend when working on my taxes, and wow - it was actually super helpful! Uploaded my 1098-T and answered questions about my living situation, and it laid everything out clearly showing exactly what portion of my scholarship was taxable. The documentation it provided made me feel way more confident that I'm filing correctly. Definitely cleared up my confusion about how to handle my apartment costs vs. qualified education expenses!

For anyone still confused about their scholarship/grant money and having trouble getting answers from the IRS - I tried calling them 8 TIMES with no luck. Finally used https://claimyr.com to get through to an actual IRS person. Check out how it works: https://youtu.be/_kiP6q8DX5c. They got me connected to an IRS agent in about 20 minutes after I'd spent literal days trying on my own. The agent confirmed exactly how to report my scholarship money used for apartment rent vs. tuition. Worth it just for the peace of mind knowing I'm doing it right!

Ok I need to eat my words from earlier. After posting that skeptical comment, I was still stressing about my tax situation with scholarships and apartment rent, so I caved and tried that Claimyr service. Not gonna lie, it actually worked! Got through to an IRS rep in about 35 minutes when I'd previously wasted HOURS trying. The agent confirmed that yes, scholarship money used for off-campus apartments is considered taxable income, but gave me some specific advice about my situation that was really helpful. Guess sometimes these services are legit!

I learned this the hard way last year. Had about $12000 in scholarships, used $8000 for tuition and $4000 for my apartment. Didn't report the $4000 as income because I didn't know I had to. Got a letter from the IRS about underreporting income. Had to pay the taxes plus interest. Don't make my mistake!

Quick question - does it matter if your scholarship specifically says it's for "housing" or if it's just a general scholarship? My financial aid letter breaks out different categories and I have one labeled as a "housing scholarship" separate from my tuition scholarship.

Just wanted to add another perspective here - I work as a tax preparer and see this exact situation constantly with college students. The confusion is totally understandable because the rules aren't intuitive at all. One thing I'd emphasize is keeping really good records of your expenses. Even though your scholarship money might all go into one account, create a simple spreadsheet tracking what you spent on qualified expenses (tuition, mandatory fees, required books/supplies) versus non-qualified expenses (rent, food, utilities, etc.). Also, don't forget that if you have a job in addition to receiving scholarships, you might be able to claim education credits like the American Opportunity Tax Credit on your qualified expenses, which could help offset some of the tax burden from the scholarship income used for housing. The key is just making sure you report everything correctly - the IRS will eventually catch unreported scholarship income since they get copies of your 1098-T too. Better to be proactive and get it right from the start!

This is such a helpful thread! I'm in a similar situation and was completely lost about how to handle my scholarship money for apartment rent. Reading through everyone's experiences really clarifies things. One thing I'm still wondering about though - what if you receive scholarship money in one tax year but use it for expenses in the next year? Like if I got a scholarship disbursement in December 2024 but used it to pay spring semester tuition and rent in January 2025, which year do I report the taxable portion on? Also, for anyone still struggling with the calculations, I found it helpful to start with your total scholarship/grant amount, then subtract out your qualified expenses in this order: tuition first, then required fees, then required books/supplies. Whatever's left over after covering those qualified expenses is what you'd report as taxable income, regardless of whether you actually spent it on rent or just kept it in savings. The record-keeping advice from Molly is spot on - I wish I had started tracking everything more carefully from the beginning of the school year instead of trying to reconstruct it all at tax time!

This thread has been incredibly helpful! I'm a graduate student dealing with a similar situation and wanted to share what I learned from my university's financial aid office that might help others. One important detail that hasn't been mentioned yet - if you're a graduate student receiving a stipend or assistantship that covers housing costs, the tax treatment can be slightly different than undergraduate scholarships. Graduate stipends are often considered taxable income regardless of how you use them, and you should receive a 1099-MISC rather than having it reported on a 1098-T. Also, for anyone using tax software like TurboTax or H&R Block, most of them have specific sections for reporting scholarship income that walk you through the qualified vs. non-qualified expense calculations. It's usually under the "Education" section and asks you to enter your total scholarships/grants and then your qualified education expenses. One last tip - if you're claiming education credits (like the American Opportunity Credit), be strategic about which expenses you use for the credit versus which ones you use to reduce your taxable scholarship income. You can't "double-dip" by using the same expenses for both purposes, but you can optimize to minimize your overall tax liability. The apartment rent situation is definitely taxable income though - that part is clear regardless of whether you're undergraduate or graduate level!