IRS

• Some scholarships and grants are considered taxable income for college students when filing with the IRS, so you'll need to report your check. All or part of the scholarship may need to be reported, even if you don't receive a tax form (such as a Form W-2) along with the scholarship check. If you're not a college student working toward a degree -- for example, you're enrolled in a certificate program -- the entire amount may become taxable after being reported. If you're working toward a degree, parts of the scholarship may be considered exempt. This includes parts of the scholarship used to pay tuition, books or student fees. Taxable portions include scholarship amounts used to cover room and board costs.
  
  

FAFSA

• College students often fill out the FAFSA, or Free Application for Federal Student Aid, in order to receive government-issued loans, grants and work-study funds. The FAFSA requires students to submit financial-related information including income, assets, and (in some cases) parental financial information in order to qualify. Assets include scholarship money. If you receive a scholarship check prior to filling out the FAFSA form, you'll need to report the received check on the FAFSA form. If you receive notice that you've been selected as a scholarship recipient after filling out and finalizing your FAFSA award, it won't be necessary to correct the FAFSA because adjustments will be made through your school financial aid office.
  
  

School

• After receiving a scholarship check not already accounted for on your FAFSA, you'll need to report the fund to the financial aid office at your school. Federal funds, whether loans or grants, aren't issued directly to your bank account. Instead, they're funneled through school financial aid offices. Reporting your scholarship funds to the financial aid office will likely trigger an adjustment to your aid award. The office may reduce your aid amount for the semester or quarter to account for the check you've received.
  
  

Scholarship Committees

• It's not always necessary to report your scholarship check to committees representing other scholarships that you're pursuing. On applications that ask you to list outside scholarships that you've already received or have been selected to receive, you must report your scholarship checks. Not all scholarships take financial need into consideration; some applications may not inquire into your financial status. In this case, it's not necessary to report a scholarship check. However, if you've been selected to receive a prestigious scholarship, listing this honor on another scholarship application might enhance your competitiveness.