Yes, Segal AmeriCorps education awards are taxable in the year they are paid. The 1099-MISC will show the amount of the prize in box 3, Other Revenues. Because the prize is taxable income, any tuition, fees, books and materials paid with that amount are eligible for education credits. If the Trust makes a payment on qualified student loans to an educational institution or lender for the full amount of a full-time education grant in a calendar year, the member is responsible for income taxes due in that calendar year on the full amount.
The total amount of interest payments and the Segal AmeriCorps Education Award are listed together on Form 1099.While those expenses may be part of your overall educational costs, those expenses are not considered qualified educational expenses for tax purposes. Please note that the Segal AmeriCorps Education Award is subject to federal taxes in the year the payment is made. Both interest payments and payments from educational scholarship accounts have been determined to be taxable income.