Do I Have To File Interest Income On My Taxes?

Interest income is generally taxable, meaning you usually need to report it on your federal income tax return. At income-partners.net, we understand the importance of navigating the complexities of income reporting, and we’re here to provide you with the insights and resources you need to thrive, including potential partnership opportunities that can further boost your earnings. Let’s delve into when you need to report interest income, the types of interest that are taxable or tax-exempt, and how this knowledge can benefit your financial strategy by building trust and establishing robust financial compliance.

1. What Is Interest Income, And Do I Always Have To File It?

Yes, typically, you must report interest income on your tax return; interest income includes any earnings you receive from investments such as bank accounts, CDs, and bonds. While most interest income is taxable at the federal level, there are exceptions, such as certain tax-exempt bonds. You can learn more about how different types of partnership structures can influence your tax liabilities by visiting income-partners.net.

1.1. Understanding the Basics of Taxable Interest

Taxable interest includes earnings from various sources. Knowing what’s taxable helps you accurately report your income and avoid potential penalties.

Bank Accounts: Interest earned from savings accounts, checking accounts, and money market accounts.
Certificates of Deposit (CDs): Interest from CDs is taxable in the year it becomes available to you.
Corporate Bonds: Interest earned from corporate bonds.
Treasury Bills, Notes, and Bonds: While subject to federal income tax, interest from these is exempt from state and local income taxes.

1.2. Exceptions: Nontaxable and Excludable Interest

Not all interest income is taxable. Here are some key exceptions that can reduce your tax liability:

Series EE and Series I Bonds: Interest redeemed from these bonds may be excluded from income if used for qualified higher education expenses.
State and Municipal Bonds: Interest from bonds issued by a state, the District of Columbia, or a U.S. territory is often tax-exempt at the federal level.
U.S. Department of Veterans Affairs: Interest on insurance dividends left on deposit with the U.S. Department of Veterans Affairs is nontaxable.

1.3. What Is Form 1099-INT, And When Will I Receive It?

Form 1099-INT, Interest Income, is the document you’ll receive if you’ve earned $10 or more in interest during the tax year; this form summarizes the amount of interest income you’ve received and is sent to both you and the IRS.

1.3.1. Key Details on Form 1099-INT

Payer Information: Includes the name, address, and taxpayer identification number (TIN) of the institution that paid you the interest.
Recipient Information: Your name, address, and TIN.
Interest Income: The total amount of taxable interest income you earned.
Tax-Exempt Interest: Any tax-exempt interest you received is also reported, though it is not subject to federal income tax.
Backup Withholding: If you were subject to backup withholding due to an incorrect TIN or other issues, the amount withheld will be indicated on the form.

1.3.2. What To Do If You Don’t Receive Form 1099-INT

Even if you don’t receive Form 1099-INT, you are still required to report all taxable interest income on your tax return; keep accurate records of all interest income you receive throughout the year.

1.4. How Do I Report Interest Income On My Tax Return?

You typically report interest income on Schedule B (Form 1040), Interest and Ordinary Dividends; use this form to list all sources of interest income and the amounts you received.

1.4.1. Step-by-Step Guide to Reporting Interest Income

Gather Your Documents: Collect all Forms 1099-INT and any records of interest income you received.
Complete Schedule B (Form 1040): List each payer and the amount of interest income you received from them.
Include Tax-Exempt Interest: Report any tax-exempt interest you received in the designated section. This is for informational purposes and does not convert tax-exempt interest into taxable income.
Attach to Form 1040: Submit Schedule B along with your Form 1040.

1.5. What Happens If I Fail To Report Interest Income?

Failing to report interest income can lead to penalties and interest charges from the IRS; underreporting income can also trigger an audit.

1.5.1. Potential Consequences of Not Reporting Interest Income

Penalties: The IRS may impose penalties for underreporting income.
Interest Charges: Interest will be charged on the underpaid tax amount.
Audits: The IRS may conduct an audit to verify your income and deductions.
Legal Issues: In severe cases, intentionally failing to report income can lead to legal consequences.

1.6. What Is Original Issue Discount (OID)?

Original Issue Discount (OID) occurs when a bond is issued at a price lower than its face value; the difference between the issue price and the face value is the OID, which is treated as interest for tax purposes.

1.6.1. Key Aspects of Original Issue Discount (OID)

Definition: The discount a bond is issued at compared to its face value.
Tax Treatment: OID is treated as taxable interest and must be reported annually.
Form 1099-OID: You will receive this form if the OID is $10 or more.

1.6.2. How to Handle OID on Your Taxes

OID is reported on Form 1040, Schedule B. The Form 1099-OID provides the necessary details to accurately report this income.

1.7. What Are Nominee Recipient Situations?

A nominee recipient is someone who receives interest income on behalf of someone else; if you receive a Form 1099-INT or 1099-OID for interest that belongs to another person, you are considered a nominee recipient by the IRS.

1.7.1. How to Handle Nominee Recipient Situations

Form 1099-INT or 1099-OID: If you receive this form as a nominee, it includes interest belonging to someone else.
Reporting: You must file a Form 1099-INT or 1099-OID to report the income to the actual owner.
Nominee Information: Include your information as the nominee and the actual owner’s information on the form.

1.8. How Can I Minimize My Tax Liability On Interest Income?

To minimize your tax liability on interest income, consider tax-advantaged accounts such as IRAs, municipal bonds, and Series EE/I bonds used for education.

1.8.1. Strategies to Minimize Tax Liability

Tax-Advantaged Accounts:
- Individual Retirement Accounts (IRAs): Contribute to traditional or Roth IRAs to defer or eliminate taxes on interest income.
- 401(k) Plans: Utilize employer-sponsored 401(k) plans for tax-deferred growth.
Municipal Bonds: Invest in municipal bonds, which offer tax-exempt interest income at the federal level.
Series EE and Series I Bonds: Use these bonds for qualified higher education expenses to exclude interest from income.
Tax-Efficient Investments: Consider investments that generate capital gains rather than interest, as capital gains may be taxed at a lower rate.

By understanding the nuances of interest income and its tax implications, you can make informed financial decisions that benefit your bottom line. Income-partners.net offers resources and partnership opportunities to help you optimize your financial strategies.

2. What Types Of Interest Income Are Taxable?

Generally, most interest income is taxable at the federal level, including interest from bank accounts, corporate bonds, and certain government securities; understanding the specifics of taxable interest can help you accurately report your income and plan your financial strategy.

2.1. Interest From Bank Accounts

Interest earned on savings accounts, checking accounts, and money market accounts is taxable income; these earnings are typically reported to you on Form 1099-INT.

2.1.1. Types of Taxable Bank Accounts

Savings Accounts: Interest earned on funds held in savings accounts.
Checking Accounts: Interest earned on checking account balances.
Money Market Accounts: Interest from money market accounts, which offer higher interest rates than traditional savings accounts.

2.2. Interest From Certificates Of Deposit (CDs)

Interest earned on CDs is taxable in the year it becomes available to you; financial institutions will provide Form 1099-INT to report these earnings.

2.2.1. Key Points About CDs

Fixed Interest Rates: CDs typically offer fixed interest rates for a specific term.
Taxable Income: Interest earned is taxable in the year it is credited to your account.
Early Withdrawal Penalties: Be aware of potential penalties for withdrawing funds before the CD matures.

2.3. Interest From Corporate Bonds

Interest income from corporate bonds is taxable at the federal, state, and local levels; these earnings are reported on Form 1099-INT.

2.3.1. Understanding Corporate Bonds

Issuer: Corporate bonds are issued by companies to raise capital.
Interest Payments: Bondholders receive periodic interest payments.
Tax Implications: Interest income is fully taxable.

2.4. Interest From Treasury Bills, Notes, And Bonds

Interest from U.S. Treasury securities is subject to federal income tax but is exempt from state and local income taxes; this can be a significant advantage for investors in high-tax states.

2.4.1. Tax Advantages of Treasury Securities

Federal Tax: Interest is taxable at the federal level.
State and Local Tax Exemption: Exempt from state and local income taxes.
Form 1099-INT: Reported on Form 1099-INT.

2.5. Interest From Savings Bonds

Interest from U.S. savings bonds, such as Series EE and Series I bonds, is generally taxable at the federal level when the bonds mature or are redeemed; however, there are exceptions for educational expenses.

2.5.1. Tax Considerations for Savings Bonds

Deferral: Interest is not taxed until the bonds are redeemed or mature.
Educational Exclusion: Interest may be excluded from income if used for qualified higher education expenses.
Form 8815: Use Form 8815 to calculate the excludable amount.

2.6. Other Forms Of Taxable Interest

Various other forms of interest income are taxable, including interest received with damages or delayed death benefits; these are typically reported on Form 1099-INT if the amount is $600 or more.

2.6.1. Miscellaneous Taxable Interest

Settlements: Interest received as part of a settlement or damage award.
Delayed Benefits: Interest on delayed death benefits.
Business Interest: Interest paid to you by a business.

Understanding which types of interest income are taxable is essential for accurate tax reporting. Income-partners.net provides resources and partnership opportunities to help you navigate these financial complexities and optimize your tax strategy.

3. Are There Any Types Of Interest Income That Are Not Taxable?

Yes, there are specific types of interest income that are either nontaxable or excludable, such as interest from certain municipal bonds, Series EE and I bonds used for education, and interest on U.S. Department of Veterans Affairs insurance dividends; knowing these exceptions can help you minimize your tax liability and optimize your investment strategy.

3.1. Interest From Municipal Bonds

Interest earned on bonds issued by a state, the District of Columbia, or a U.S. territory is generally tax-exempt at the federal level; this is a significant benefit for investors in high-tax brackets.

3.1.1. Tax Advantages of Municipal Bonds

Federal Tax Exemption: Interest is not subject to federal income tax.
State Tax Exemption: In some cases, interest may also be exempt from state and local taxes, especially if you reside in the state that issued the bond.
Reporting Requirement: Tax-exempt interest is still reported on your tax return for informational purposes.

3.2. Interest From Series EE And Series I Bonds Used For Education

Interest redeemed from Series EE and Series I bonds may be excluded from income if used to pay for qualified higher education expenses; this exclusion is subject to certain requirements and limitations.

3.2.1. Requirements for the Educational Savings Bond Program

Eligible Bonds: The bonds must be issued after 1989.
Qualified Expenses: The interest must be used to pay for tuition and fees at an eligible educational institution.
Income Limitations: Your modified adjusted gross income (MAGI) must be below certain limits to qualify for the exclusion.
Form 8815: Use Form 8815 to calculate the excludable amount of interest.

3.3. Interest On U.S. Department Of Veterans Affairs Insurance Dividends

Interest on insurance dividends left on deposit with the U.S. Department of Veterans Affairs is nontaxable; this is a specific exemption provided to veterans and their beneficiaries.

3.3.1. Key Details on VA Insurance Dividends

Nontaxable Status: Interest is not subject to federal income tax.
Non-Reportable: This interest is not reported on Form 1099-INT.

3.4. Other Potential Sources Of Nontaxable Interest

While less common, other specific situations may result in nontaxable interest income, such as certain types of settlements or awards; it’s essential to consult with a tax professional to determine the taxability of these amounts.

3.4.1. Consulting A Tax Professional

For unusual or complex situations, seeking advice from a qualified tax advisor can ensure accurate reporting and help you take advantage of all available tax benefits.

Understanding the types of interest income that are not taxable can help you make informed investment decisions and minimize your tax liability. Income-partners.net offers resources and partnership opportunities to assist you in optimizing your financial strategies.

4. What Is Original Issue Discount (OID) And How Does It Affect My Taxes?

Original Issue Discount (OID) is the difference between a bond’s face value and its original issue price when the bond is issued at a discount; for tax purposes, OID is treated as interest income and must be reported annually, even if you don’t receive a cash payment.

4.1. Understanding Original Issue Discount (OID)

When a bond is issued for less than its face value, the difference is considered OID. This discount is essentially a form of interest that accrues over the life of the bond.

4.1.1. Key Characteristics of OID

Definition: The difference between a bond’s face value and its original issue price.
Accrual: OID accrues over the life of the bond.
Taxable Interest: Treated as taxable interest income.

4.2. How OID Is Taxed

OID is taxed annually as if you received the interest in cash, even though you may not receive the payment until the bond matures; this annual inclusion can impact your tax liability.

4.2.1. Annual Inclusion of OID

Phantom Income: You are taxed on income you haven’t actually received yet.
Form 1099-OID: You will receive this form detailing the amount of OID to report.
Accurate Reporting: Important for accurately reporting income to avoid penalties.

4.3. Form 1099-OID: What You Need To Know

Form 1099-OID reports the amount of original issue discount that you must include in your gross income for the tax year; payers are required to furnish this form to recipients if the OID is at least $10.

4.3.1. Key Information on Form 1099-OID

Payer Details: Includes the name, address, and TIN of the issuer of the bond.
Recipient Details: Your name, address, and TIN.
OID Amount: The amount of OID you need to report as income.
Other Information: May include details on tax-exempt OID.

4.4. Calculating OID

The method for calculating OID can be complex, especially for bonds with more intricate features. Generally, the calculation involves determining the constant yield method, which spreads the discount over the bond’s life.

4.4.1. Simplified Calculation

For a simple bond, the OID is calculated as follows:

OID = (Face Value - Issue Price) / Number of Years to Maturity

However, the IRS requires using the constant yield method, which is more precise.

4.5. Reporting OID On Your Tax Return

You report OID on Schedule B (Form 1040), Interest and Ordinary Dividends; this form requires you to list the payer’s name and the amount of OID.

4.5.1. Step-by-Step Reporting

Gather Form 1099-OID: Collect all forms received.
Complete Schedule B: List each payer and the OID amount.
Attach to Form 1040: Submit Schedule B with your Form 1040.

4.6. OID On Tax-Exempt Bonds

Even for tax-exempt bonds, you may receive Form 1099-OID indicating tax-exempt OID; while this is not taxable at the federal level, it is still reported for informational purposes.

4.6.1. Reporting Tax-Exempt OID

Information Only: Reporting does not convert tax-exempt interest into taxable interest.
Form 1099-OID: Still reported on this form.
Accurate Records: Maintain accurate records for tax reporting.

Understanding OID and its tax implications is crucial for bondholders. Income-partners.net provides resources and partnership opportunities to help you navigate these financial complexities and optimize your tax strategy.

5. What Is A Nominee Recipient And How Does It Affect My Taxes?

A nominee recipient is someone who receives interest income on behalf of someone else; if you receive a Form 1099-INT or 1099-OID that includes interest (or OID) belonging to another person, the IRS considers you a nominee.

5.1. Understanding Nominee Recipient Status

If you receive income as a nominee, you are acting as an intermediary, and the income is not actually yours for tax purposes; this situation requires you to take specific steps to ensure the income is properly attributed to the correct owner.

5.1.1. Key Aspects of Nominee Recipient Status

Definition: Receiving income on behalf of someone else.
Responsibility: Required to report the income to the actual owner.
Form 1099-INT or 1099-OID: You receive this form but are not the actual owner of the income.

5.2. Why Does Nominee Recipient Status Exist?

Nominee recipient status exists to ensure that income is taxed to the correct individual or entity; this is particularly common in situations involving trusts, custodial accounts, or when someone is acting as an agent.

5.2.1. Common Scenarios

Trusts: A trustee may receive income on behalf of a trust beneficiary.
Custodial Accounts: A parent or guardian may receive income on behalf of a minor child.
Agents: Someone acting as an agent for another person.

5.3. How To Report Income As A Nominee Recipient

As a nominee recipient, you must file a Form 1099-INT or 1099-OID to report the interest income to the actual owner; you will include your information as the nominee and the actual owner’s information on the form.

5.3.1. Step-by-Step Reporting Process

Receive Form 1099-INT or 1099-OID: Note that the income belongs to someone else.
File Form 1099-INT or 1099-OID: Prepare a new form indicating you as the payer and the actual owner as the recipient.
Include Your Information: As the nominee, include your name, address, and TIN in the payer section.
Include Owner’s Information: In the recipient section, include the actual owner’s name, address, and TIN.
Send Copies: Provide a copy to the actual owner and file a copy with the IRS.

5.4. Avoiding Double Taxation

By correctly reporting income as a nominee recipient, you avoid the risk of being taxed on income that is not actually yours; this ensures that the tax liability falls on the appropriate individual or entity.

5.4.1. Importance of Accurate Reporting

Preventing Errors: Accurate reporting prevents errors and potential audits.
Compliance: Ensures compliance with IRS regulations.
Fairness: Ensures the correct individual pays taxes on the income.

5.5. Example Of Nominee Recipient

Suppose you receive a Form 1099-INT for $500 in interest from a bank account that you hold for your elderly mother. In this case, you are the nominee recipient, and your mother is the actual owner of the income.

5.5.1. Reporting Example

Your Responsibility: You must file a Form 1099-INT, listing yourself as the payer and your mother as the recipient.
Form Details: Include your name, address, and TIN in the payer section and your mother’s information in the recipient section.
IRS and Recipient Copies: Provide a copy to your mother and file a copy with the IRS.

Understanding your responsibilities as a nominee recipient is crucial for accurate tax reporting. Income-partners.net offers resources and partnership opportunities to help you navigate these financial complexities and ensure compliance with tax regulations.

6. How Do I Report Tax-Exempt Interest On My Tax Return?

Tax-exempt interest is reported on Form 1040, Schedule B, Interest and Ordinary Dividends; although it is not taxable at the federal level, reporting this income is an informational requirement.

6.1. Understanding Tax-Exempt Interest Reporting

While tax-exempt interest is not subject to federal income tax, the IRS requires you to report it on your tax return; this helps the IRS track the amount of tax-advantaged income you receive.

6.1.1. Why Report Tax-Exempt Interest?

Informational Requirement: The IRS requires reporting for informational purposes.
Tracking Tax Benefits: Helps track the amount of tax-advantaged income.
No Tax Liability: Reporting does not convert tax-exempt interest into taxable income.

6.2. Sources Of Tax-Exempt Interest

Common sources of tax-exempt interest include municipal bonds issued by states, cities, and other local governments; interest from these bonds is often exempt from federal, state, and local taxes, depending on the issuer and your residency.

6.2.1. Common Sources of Tax-Exempt Interest

Municipal Bonds: Bonds issued by states, cities, and local governments.
U.S. Territory Bonds: Bonds issued by U.S. territories.

6.3. Form 1099-INT And Tax-Exempt Interest

You will receive Form 1099-INT if you earn $10 or more in tax-exempt interest; this form will specify the amount of tax-exempt interest you received during the tax year.

6.3.1. Key Details on Form 1099-INT

Payer Information: Includes the name, address, and TIN of the institution that paid you the interest.
Recipient Information: Your name, address, and TIN.
Tax-Exempt Interest Box: Shows the amount of tax-exempt interest you received.

6.4. Completing Schedule B (Form 1040)

When completing Schedule B, you will list the total amount of tax-exempt interest you received in the designated section; this is separate from the section where you report taxable interest.

6.4.1. Step-by-Step Guide to Reporting

Gather Form 1099-INT: Collect all forms showing tax-exempt interest.
Locate Tax-Exempt Interest Section: On Schedule B, find the section for tax-exempt interest.
Enter Total Amount: Enter the total amount of tax-exempt interest you received.
Attach to Form 1040: Submit Schedule B with your Form 1040.

6.5. State And Local Tax Considerations

While municipal bond interest is generally exempt from federal income tax, the rules regarding state and local taxes can vary; some states may tax interest from out-of-state municipal bonds, while others may offer a full exemption.

6.5.1. State Tax Rules

In-State Bonds: Interest from bonds issued within your state is often exempt from state and local taxes.
Out-of-State Bonds: Some states tax interest from bonds issued outside the state.
Consult State Tax Laws: Check your state’s specific rules to determine the taxability of municipal bond interest.

6.6. Original Issue Discount (OID) On Tax-Exempt Bonds

Even with tax-exempt bonds, you may encounter Original Issue Discount (OID); tax-exempt OID is also reported on Form 1099-OID and must be reported on your tax return for informational purposes.

6.6.1. Reporting Tax-Exempt OID

Form 1099-OID: You will receive this form if you have tax-exempt OID.
Schedule B: Report the amount in the designated section.
Informational Only: Reporting does not make the OID taxable.

Understanding how to report tax-exempt interest is essential for accurate tax filing. Income-partners.net offers resources and partnership opportunities to help you navigate these financial complexities and optimize your tax strategy.

7. What Are Series EE And Series I Bonds And How Are They Taxed?

Series EE and Series I bonds are U.S. savings bonds that offer a safe and low-risk way to save; Series EE bonds earn a fixed interest rate, while Series I bonds earn a rate that adjusts with inflation; the interest earned on these bonds is subject to federal income tax, but it may be exempt if used for qualified education expenses.

7.1. Understanding Series EE Bonds

Series EE bonds are fixed-rate bonds that earn a guaranteed rate of return for up to 30 years; they are a popular choice for long-term savings goals.

7.1.1. Key Features of Series EE Bonds

Fixed Interest Rate: Earn a fixed interest rate for the life of the bond.
Purchase Limit: There is an annual limit on the amount you can purchase electronically.
Redemption: Can be redeemed after 12 months, but there is a penalty if redeemed within the first five years.

7.2. Understanding Series I Bonds

Series I bonds are inflation-indexed bonds, meaning their interest rate adjusts with changes in the Consumer Price Index (CPI); this makes them a good option for protecting your savings from inflation.

7.2.1. Key Features of Series I Bonds

Inflation-Indexed Rate: Interest rate adjusts with inflation.
Two Components: The interest rate consists of a fixed rate and an inflation rate.
Purchase Limit: There is an annual limit on the amount you can purchase electronically.

7.3. Tax Implications Of Series EE And Series I Bonds

The interest earned on Series EE and Series I bonds is subject to federal income tax, but you have the option to defer paying taxes until the bonds are redeemed or mature; alternatively, you can choose to report the interest annually.

7.3.1. Tax Deferral

Defer Taxes: You can defer paying taxes on the interest until you redeem the bonds.
Year of Redemption: The interest is taxable in the year you redeem the bonds.

7.3.2. Annual Reporting

Elect to Report Annually: You can choose to report the interest each year.
IRS Form: Use IRS forms to report the interest annually.

7.4. Education Tax Exclusion

One of the most significant tax benefits of Series EE and Series I bonds is the ability to exclude the interest from income if the bonds are used to pay for qualified higher education expenses; this exclusion is subject to certain requirements and limitations.

7.4.1. Requirements for the Education Tax Exclusion

Eligible Bonds: The bonds must be issued after 1989.
Qualified Expenses: The interest must be used to pay for tuition and fees at an eligible educational institution.
Income Limitations: Your modified adjusted gross income (MAGI) must be below certain limits to qualify for the exclusion.
Form 8815: Use Form 8815 to calculate the excludable amount of interest.

7.5. Reporting Series EE And Series I Bond Interest

When you redeem Series EE and Series I bonds, you will receive Form 1099-INT, which reports the amount of interest you earned; you will use this form to report the interest on your tax return, either as taxable income or as an exclusion for education expenses.

7.5.1. Using Form 1099-INT

Interest Amount: The form shows the total interest earned.
Taxable Income: Report the interest as taxable income on Schedule B (Form 1040).
Education Exclusion: If eligible, use Form 8815 to calculate the excludable amount.

Understanding the tax implications of Series EE and Series I bonds can help you make informed savings and investment decisions. income-partners.net offers resources and partnership opportunities to help you navigate these financial complexities and optimize your tax strategy.

8. What Is Form 8815 And How Do I Use It?

Form 8815, Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989, is used to calculate the amount of interest you can exclude from your income when you use the bond proceeds to pay for qualified higher education expenses.

8.1. Understanding Form 8815

Form 8815 allows taxpayers to exclude the interest earned on Series EE and Series I bonds from their taxable income if the bonds are used to pay for qualified education expenses; this exclusion can significantly reduce your tax liability.

8.1.1. Purpose of Form 8815

Calculate Exclusion: To determine the amount of interest that can be excluded.
Reduce Taxable Income: To lower your overall tax liability.
Education Savings: To incentivize saving for education.

8.2. Eligibility Requirements For The Exclusion

To be eligible for the education tax exclusion, you must meet several requirements, including income limitations, qualified education expenses, and bond ownership rules.

8.2.1. Key Requirements

Bonds Issued After 1989: Only bonds issued after 1989 qualify.
Qualified Expenses: The bond proceeds must be used for tuition and fees at an eligible educational institution.
Eligible Educational Institution: Includes colleges, universities, and vocational schools.
Income Limitations: Your modified adjusted gross income (MAGI) must be below certain limits.
Bond Ownership: The bonds must be owned by the parent or the student.

8.3. Qualified Education Expenses

Qualified education expenses include tuition and fees required for enrollment or attendance at an eligible educational institution; these expenses must be reduced by any scholarships, grants, or other tax-free educational benefits received.

8.3.1. Types of Qualified Expenses

Tuition: The cost of courses and classes.
Fees: Charges required for enrollment or attendance.
Required Expenses: Expenses that are necessary for attending the institution.

8.3.2. Expenses That Do Not Qualify

Room and Board: