<p>Do you need to provide scholarship/grant money you received for the past/current school year on FAFSA? </p>
<p>The FAFSA form says: "Grant and scholarship aid reported to the IRS." Do I need to report this to the IRS also? Does that mean I need to fill out a 1040 as a dependent student? </p>
<p>I only get government grants and university scholarships to pay for my college expenses and have no money outside of that whatsoever.</p>
<p>Any scholarships or grants over the amount of tuition and fees and required books is taxable income. For instance scholarships/grants used to pay room and board are taxable income. So if you received $12,000 in scholarships/grants (including need based grants such as the Pell) and your tuition/fees/required books totaled $7000 then $5000 of the scholarships/grants would be taxable income.</p>
<p>Whether you have to actually file a return depends on your total income including the taxable portion of scholarships/grants. Generally for a dependent single student you are not required to file if your income is less than $5700. However this figure might be lower if you have any unearned income such as interest. </p>
<p>Scholarships and grants are not reported on FAFSA. However if you do have to file a tax return and your reported income includes taxable grants and scholarships you then report the amount of the income that is grants/scholarships. The EFC formula then deducts those grants/scholarships from your income so they do not affect your EFC.</p>
<p>Thanks for your reply swimcatsmom. </p>
<p>Okay, so basically if any of my excess scholarship/grants is greater than $5700, I would have to report it on FAFSA. If it is less than that amount, I don’t need to include any scholarship and grant amounts on FAFSA, thus that section equal to $0.00. Is this correct?</p>
<p>Not exactly. If you do have to do a tax return then your AGI (Adjusted Gross Income)from the tax return is reported on FAFSA question 36. Then you would report any scholarships/grants included in the AGI on question 44d. The amount reported on question 44d would be deducted from the amount reported in question 36 in the EFC formula.</p>
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<p>So say you had enough income to have to do a tax return and your AGI on your tax return was $6000. You would report the AGI of 6,000 in question 36. If $5000 of that AGI was taxable scholarships/grants then you would report $5000 in question 44d. That way the EFC formula will deduct the scholarships/grants of $5000 from your AGI of $6000 leaving only $1000 of income to be included in the EFC computation. If the entire $6000 AGI was from scholarships/grants you would report 6000 in question 36 and question 44d.</p>
<p>If your total income (including taxable scholarships/grant) is not enough to be required to file a tax return then you do not enter the your scholarships/grant anywhere on FAFSA.</p>
<p>Swimcatsmom, thanks a lot for your elaborate explanation. I really appreciate it. </p>
<p>So if my total income (including any scholarships/grants) total over $5,700 for any given year, I need to file a tax return (1040)? Will my scholarship/grant money be taxed?</p>
<p>You only report any taxable scholarships/grants - you do not report the untaxable portion. Any scholarship/grant money used for qualified expenses, such as tuition and fees, is not taxable scholarship/grant income. Any scholarship grant money used for unqualified expenses (such as room and board) is taxable income. Whether it *is *taxed or not depends on your total income and whether it is enough to be taxed.</p>
<p>For instance suppose you get scholarships/grants of $9,000 and you use $5000 for tuition & fees and the remaining $4000 towards room and board. The $5000 used for tuition and fees is not taxable scholarship/grant income as it was used for qualified expenses. The $4000 you used for room and board is taxable income. But if your total income including that $4000 does not hit the threshold ($5700 for 2009 for a single person with just earned income and who can be claimed on someone else’s tax return) where you are required to file a tax return then you will not have to file and you will not have any taxes. </p>
<p>Now say you have scholarships/grants of $12,000 and your tuition and fees are $5000. The $5000 would not be taxable scholarship/grant income because it is used to pay tuition and fees. If the balance of $7000 is used to pay non qualified expenses (such as room and board) the that $7000 is taxable scholarship/grant income. In this instance your taxable income is high enough that you will be required to file a return income. If you have no other income then your income reported would be the $7000 taxable scholarship/grant income. You would then be taxed on that reported income of $7000 (though generally the 1st $5700 would be your standard deduction allowed by the IRS, so the amount in excess of 5700 would be what would actually attract taxes - but you have to report all the taxable income). You do not report the part of the scholarships that are non taxable scholarships/grants - the $5000 used to pay qualified expenses.</p>
<p>thanks swimcatsmom for this excellent explanation. I’ve been wondering if D needed to file as her scholarships are slightly more than tuition/fees/books. She didn’t make enough money though so she’s fine.</p>
<p>Now should I put my total scholarship and grant money for the year, or just what I am getting for the semester in my FAFSA for 2010?</p>
<p>It is the taxable scholarships you received during the TAX year, not the school year. So for the 2009 tax return it would be any grants/scholarships you actually received in excess of qualified expenses for spring/summer/fall 2009. Not taxable scholarships awarded for the 2009-2010 school year.</p>
<p>And you only put any taxable scholarships that are included in your AGI on your tax return. If they are not taxable you do not put them anywhere on FAFSA.</p>
<p>OP it depends on the scholarship. If this is a merit scholarship given by one of your schools its not necessary to report. FAFSA is most likely implying for one to report private funded scholarships that is appliable to anywhere.</p>
<p>^^^^ No that is incorrect. FAFSA is asking about taxable scholarships (any scholarships/grants - this includes merit scholarships from your school and grants such as the Pell - in excess of qualified education expenses) included in the AGI reported on FAFSA. If you do not report the taxable scholarships included in the AGI then they will not be deducted from the AGI by the EFC formuls and your EFC will be higher.</p>
<p>Wait wait what? I thought need based stuff was nontaxable…</p>
<p>Need based aid and merit scholarships are treated the same by the IRS. Tax free only if it is used to pay for qualified education expenses (tuition/fees and required books). Otherwise it is taxable income. You still have to have enough income to be required to file a return before you eill actually incur any taxes. </p>
<p>IRS 970 has the rules.</p>
<p>this information is very helpful…
my son has to file a return as his taxable scholarship exceeds $10K, he also has about $1K in wages earned. </p>
<p>I added it on the FAFSA item, “student grant and scholarship aid reported to the IRS” but this did not add it directly onto the AGI. Since he has not filed yet, I believe I need to add the scholarship amount on the FAFSA, as “other taxable income”. thanks!</p>
<p>NO NO NO!!! Don’t do that. It is already included as income in the student’s AGI if he had to file a tax return. When you enter the AGI on FAFSA you are reporting the taxable scholarship/grants reported to the IRS as they are i the AGI. Then you report it in the “student grant and scholarship aid reported to the IRS” question (as it is in the AGI so has been reported to the IRS). Then it is deducted from the AGI in the EFC formula so it does not negatively affect the EFC.</p>
<p>If you report it as other income it will be counted again and you will increase your EFC enormously.</p>
<p>thanks swimcatsmom—just trying to clarify, since my son didn’t file his tax return yet. </p>
<p>on the fafsa, his AGI includes his earned wages, and interest income. then the scholarship aid is included on the fafsa on the item “grant and scholarship aid reported to the IRS”. is this right?</p>
<p>No. On FAFSA the AGI includes the taxable scholarships and grants (just as it will when he actually files his tax return). Then you report the part of the AGI that is taxable scholarships/grants in the “grant and scholarship aid reported to the IRS” question. This figure is then deducted from the AGI in the EFC formula.</p>
<p>For instance if his total income for the year is earned income from a job of $1,000, Interest income of $100, and taxable scholarships/grants of $10,000 then his AGI would be $11,100. That is what you put down as the AGI. Then in the “grant and scholarship aid reported to the IRS” you report that $10,000 of the AGI was from scholarships/grants. In the EFC formula the $10,000 will be deducted from the $11,100 AGI, leaving only $1100 available income for the EFC formula.</p>
<p>I have a problem I am hoping you can help me with. You seem to know your stuff! My freshman daughter received a scholarship for tuition, books, room and board–but we did not know this until July. Total shock. She also received a college financial aid of 3k, plus Pell and MAP. I was going thru chemo and was not with it, and am very afraid I did something wrong. We called both the college and scholarship people thinking this would change matters, but they said we can go ahead and keep the Fafsa money and use it as needed. Now I hear we get another payout of this FaFsa money again in Jan. It really is alot of money and keeping in mind she has her scholarship, and we used the first set of Fafsa money for a new computer, traveling expenses, clothes, dorm needs…it doesnt seem right. I did ask to return the money but was told it was hers to use. I claim both her and my son (who dropped out of college for 2 years but will return in Jan) on my taxes and am very confused and scared I should have returned the Fafsa money, but I listened to the college. At the time it was a blessing, but now I am scared I did something wrong. Help please.</p>
<p>Your daughter would have received half the monies this fall for her college expenses. The amount that goes towards tuitions, fees books (check out the computer, don’t know for sure), school supplies is not reportable for taxes. The rest is. She may or may not need to file taxes, depending on how much the amount ends up being and how much other money she earned at jobs. She may not owe any taxes at all. </p>
<p>What is the “FAFSA” money? Is it PELL grant or is it loan money, like Stafford loans? Loans do not get reported at all because they are not giving money, but lending it. </p>
<p>When you and your DD have to file FAFSA for the next year, you only have to report those funds NOT reported on your DD’s tax form, and again, only grant money, not loan, and only what she was given for the first semester. If she is going to file a tax return, do not report the money that she reported on the return or it will be double counted. Again it is only money that did not go towards tuition, fees, books,and school supplies that is reported. It is subtraced out so it will not affect your EFC.</p>
<p>Thank you for replying cptofthehouse. I am not sure I am clear on your answer. Sorry. My daughter did not work this year at all, so I guess I have to put everything down on my taxes? She received a full scholarship from an outside non-profit, and THEN also had a Pell Grant and MAP grant, as well as 3K from the college itself given to her when school started. (This was all awarded prior to knowing she won the scholarship.) It was all very last minute. Because she has no income to report, does she have to file this info to the IRS or to FAFSA? It was a 25K scholarship and then $6210 (each semester) of the Pell, and Map and school financial aid. We don’t even want to use the next $6210 in fear of having to pay it all back. I make 35K a year before taxes, and with having cancer this year, am in financial straights. I am scared I will have to pay taxes on the first 6200 we spent–I paid off my son’s college loan (even tho it was my daughter’s Fafsa money), she got a computer,…lots of expenses for her and my son paid out. Sorry I am jabbering.</p>