Higher Education Emergency Relief Fund and Emergency Financial Aid Grants under the Cares Act

Sections 3504, 18004, and 18008 of the Coronavirus Aid, Relief, and Economic Security Act (Cares Act) enacted on March 27, 2020, allow higher education institutions to use certain funds allocated by the Department of Education to support students and higher education institutions with expenses and financial needs related to the Coronavirus (COVID-19) pandemic.

Section 3504 of the Cares Act allows higher education institutions to use additional supplemental educational opportunity  grant funds they receive through the Higher Education Act to award emergency financial aid grants to support graduate and undergraduate students experiencing “unexpected expenses and unmet financial need” as the result of COVID-19 pandemic.

Emergency financial aid grants under the Cares Act for unexpected expenses, unmet financial need, or expenses related to the disruption of campus operations on account of the COVID-19 pandemic, such as unexpected expenses for food, housing course materials, technology, health care are qualified disaster relief payments under section 139 of the Internal Revenue Code.

This grant is not includible in your gross income.

Because the emergency financial aid grant is not includible in your gross income, you cannot claim any deduction or credit for expenses paid with the grant including the tuition and fees deduction, the American Opportunity Credit, or the Lifetime Learning Credit.