A degree program student can exclude amounts received from a qualified scholarship or fellowship. Excludable income from a qualified scholarship or fellowship is any amount received that is for:
Tuition and fees to enroll in or attend an educational institution; or
Fees, books, supplies, and equipment required for courses at the educational institution.
Amounts used for room and board do not qualify for the exclusion.
Payments received for services required as a condition of receiving a scholarship or fellowship grant must be included in the taxpayer’s income, even if the services are required of all students for the degree. Amounts received for teaching and research are included.