<p>My wife's company gave our daughter a $2500 scholarship for college (all full time employees may receive this if their kids are making progress towards a degree). It is renewable for four years.</p>
<p>The scholarship came in the form of a separate check, once each quarter (school is on the quarter system), made out to my wife. Unbeknownst to me, taxes were already taken out of it. She deposited this money and used it to pay our daughters tuition as each bill became due.</p>
<p>We listed the full amount of the scholarship on the FAFSA last year, when it actuality she received about 25 percent less than that. I assume that affected the amount of financial aid our daughter might be eligible for?</p>
<p>This upcoming year, should we only list the actual amount (post-tax) of the scholarship she will receive on the 2015 FAFSA? I'm not sure how this will be figured out on our upcoming taxes either since I'm wondering if this will be considered income for my wife for this past year?</p>
<p>Anyone else in a similar scenario who can shed some light?</p>
<p>You also need to inform the college that your student is receiving this outside scholarship. At some schools, outside scholarships reduce need based aid awarded by the college. This is a separate issue from the FAFSA. But schools do require this notification about outside scholarships.</p>
<p>It sounds like this is a bonus being awarded to your wife, under her SSN, taxed to her. I don’t think this is a scholarship for your child at all, just additional income to your wife.</p>
<p>I agree with @twoinanddone, if the check was payable to your wife and subject to withholding, it’s just wage income already included on her W-2 and not separately reportable to the school or on the FAFSA. Thus perhaps a 2014-2015 FAFSA correction is needed and a call to the school’s financial aid office. (How was it reported on the FAFSA??)</p>
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The scholarship came in the form of a separate check, once each quarter (school is on the quarter system), made out to my wife. </p>
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<p>the words “made out to my wife” means that it’s not actually a scholarship to your child, so probably already included as “work income” for your wife. </p>
<p>If so, it wouldn’t get included (again) separately as a scholarship for your D to report. </p>
<p>One of my kids got an employer sponsored scholarship which was a check sent directly to the institution, credited to our balance. </p>
<p>Perhaps a call to your wife’s HR department to ask if the funds could be paid directly to the school will clarify the matter? Agree that based on what you’ve posted, it sounds like extra compensation to your wife- reported as such to the IRS, with taxes withheld. Therefore not a scholarship to your child in the way that a financial aid department would think about it.</p>