Help Fafsa

Parents Forum
1

<p>I believe that I have to report the scholarships/grant moneys that my son received in 2009 but the tax preparer says that I DO NOT HAVE TO DO IT. I only report what I PAID on his college education. </p>

<p>Any ideas, I feel that she is wrong since in the form says that information was already reported to IRS..</p>

<p>HELP me please!</p>

2

<p>The college should send you a 1098T, if you paid more in tuition than he received in scholarships and grants, you need only report the tuition you paid in excess of scholarships. If you received more in scholarships than was paid in tuition, you report the difference as income</p>

3

<p>Are you sure?</p>

<p>I have called the IRS about this, a few times, and they have said that financial aid-type scholarships and loans are not reported. They said that the 1098T form is relevant to form 8863 with the Hope and Lifetime Learning credits (and another one this year too), but that the amount of grants or scholarships are not reportable as income. </p>

<p>Similarly, on the FAFSA, the usual financial aid is not reportable as income, just taxable grants and scholarships.</p>

<p>Someone can correct me here…this is my understanding from the IRS.</p>

<p>(One of our kids got a tuition refund that was on the form 1098T, so in that case, the from prevented us from incorrectly claiming the credits on form 8863, so the form is not without its uses on taxes and FAFSA’s)</p>

4

<p>Look at your chiild’s 1098T. On it, you have allowable costs, AND scholarships/grants. If the scholarships. If the scholarships/grants exceed the allowable costs (tuition, fees, books), your CHILD is required to report that as income…it is THEIR income, not the parents’. </p>

<p>I’m not a tax expert…but I’m pretty sure that financial aid that is in excess of tuition/fees/books is considered taxable income for the student.</p>

<p>Financial aid is not reported on your FAFSA.</p>

5

<p>

It all depends what the scholarship or grant is used for. Scholarships and grants (including need based aid) in excess of qualified education expenses are taxable income to the student. For instance if a scholarship is used to pay for tuition that is a qualified education expense so the scholarship is not taxable. But if a scholarship (or grant) is used to pay for room and board that is not a qualified education expense, so the scholarship or grants becomes a taxable scholarship or grant.</p>

<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf&lt;/a&gt;
The rules are all in IRS 970.</p>

6

<p>If the scholarships. If the scholarships/grants exceed the allowable costs (tuition, fees, books), your CHILD is required to report that as income…it is THEIR income, not the parents’.</p>

<p>Right…some people think that the parents are supposed to declare it, but it’s the kid’s income.</p>