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IRS Clarifies Tax Treatment of Emergency Student Aid Grants

May 18, 2021, 9:21 PM

The IRS confirmed that students who receive certain emergency financial aid under a Covid-19 relief law won’t be subject to tax on those need-based grants, according to online FAQs updated and added Tuesday.

The March 2020 CARES Act (Public Law 116-136) allowed colleges, universities, and other institutions to use supplemental funds they get under a 1965 law to give students emergency financial aid grants. The law also directed the Department of Education to provide such institutions with relief funds.

  • The agency said students don’t have to include several different financial aid ...

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