2020 – 05/08 The IRS is answering questions about the tax treatment of higher education grants under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The law allows universities to use supplemental educational opportunity grant funds to award emergency financial aid grants to students experiencing “unexpected expenses and unmet financial need” due to the novel coronavirus (COVID-19) pandemic. In new FAQs, the IRS addresses the tax impact. One question asks if an individual can claim a tuition and fees deduction for course materials after receiving and using emergency grant funds to pay for them. The IRS says “no.” The reason: The emergency grant isn’t includible in a person’s gross income.

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