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Standard Federal Tax Reporter (2013), Sec. 117. QUALIFIED SCHOLARSHIPS Click to open document in a browser [->0]
117(a) GENERAL RULE. Gross income does not include any amount received as a qualified scholarship by an individual who is a candidate for a degree at an educational organization described in section 170(b)(1)(A)(ii)[->1].
117(b) QUALIFIED SCHOLARSHIP. For purposes of this section 117(b)(1) IN GENERAL. The term "qualified scholarship" means any amount received by an individual as a scholarship or fellowship grant to the extent the individual establishes that, in accordance with the conditions of the grant, such amount was used for qualified tuition and related expenses.
117(b)(2) QUALIFIED TUITION AND RELATED EXPENSES. For purposes of paragraph (1), the term "qualified tuition and related expenses" means 117(b)(2)(A) tuition and fees required for the enrollment or attendance of a student at an educational organization described in section 170(b)(1)(A)(ii)[->2], and
117(b)(2)(B) fees, books, supplies, and equipment required for courses of instruction at such an educational organization.
117(c)(1) IN GENERAL. Except as provided in paragraph (2), subsections (a) and (d) shall not apply to that portion of any amount received which represents payment for teaching, research, or other services by the student required as a condition for receiving the qualified scholarship or qualified tuition reduction.
117(c)(2) EXCEPTIONS. Paragraph (1) shall not apply to any amount received by an individual under 117(c)(2)(A) the National Health Service Corps Scholarship Program under section 338A(g)(1)(A) of the Public Health Service Act, or
117(c)(2)(B) the Armed Forces Health Professions Scholarship and Financial Assistance program under subchapter I of chapter 105 of title 10, United States Code.

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