If you or your dependent receives a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free.

Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:

  • You or your dependent is a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities
  • The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.

Note that this does not include amounts you use to pay incidental expenses, like room and board, travel and optional equipment. It does also not include amounts you or your dependent receive as payment for teaching, research, or other services in your income. These must be included in taxable income.

For example, if a student received a $25,000 scholarship and only $11,000 was spent on tuition and other qualified expenses, then $14,000 would be taxable.

Clergy Financial Resources offers several options to help you with your tax questions or filing. Here are two options available. 

    • Pro Advisor I Tax Support
      This support service provides you comprehensive answers to your notice questions. This support service is available at a flat rate of $45.00 for each 30-minutes session.
    • Learn More About Tax Services Designed for Clergy
      As a specialist within our industry, our annual tax service is uniquely designed and bundled with three valuable services; Clergy Support which provides answers to your questions throughout the year; tax preparation to ensure compliance while minimizing your tax liability; Estimated Payment Support to prevent those unwanted surprises.

Clergy Financial Resources reviews unreimbursed ministry expenses as part of the 1040 review process, to make sure that deductions aren’t missed. If you are looking for someone to prepare your 1040 return, visit our website at https://www.clergyfinancial.com/services/clergy-tax-preparation/

Clergy Financial Resources reviews scholarships, the Lifetime Learning Credit and the American Opportunity Credit as part of our 1040 review process. It’s not too late to schedule to have your 1040 done for 2019. Visit our website at https://www.clergyfinancial.com/services/clergy-tax-preparation/ to get a tax organizer and get started today!

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101 
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com


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