<p>In searching how the states treat grants and scholarships as income, I found MA has a great site and explanation for residents and nonresidents, but I could not get the same info in the NYS site. No matter how I searched, all I got was how to get a scholarship or some other irrelevant answers. Leave it to NY to be gray in its responses!
The amount of schedules and forms to be filed in MA is incredible for nonresidents, and NY is not far behind for residents! The massive amount of paper for tax purpose could kill a forest. Of course, now NY added Form IT-2 to the mix. Any one from NY that can direct me where to look for the answer on taxing scholarships in the NY site?</p>
<p>You can check out this site:
[New</a> York State Department of Taxation and Finance](<a href=“http://74.125.93.104/search?q=cache:cMhA9MtEdIwJ:www.rit.edu/studentaffairs/iss/taxresources/NYS-2009FINAL.ppt+“NYS+tax”+%2B+scholarship&cd=4&hl=en&ct=clnk&gl=us]New”>http://74.125.93.104/search?q=cache:cMhA9MtEdIwJ:www.rit.edu/studentaffairs/iss/taxresources/NYS-2009FINAL.ppt+“NYS+tax”+%2B+scholarship&cd=4&hl=en&ct=clnk&gl=us)</p>
<p>and look for Scholarship keyword… there is also a phone number in beginning…</p>
<p>I’m not an expert in this, but I’m pretty sure that you need to pay taxes only on the portion of the scholarship that’s above and beyond tuition. Has your student received monies in excess of tuition? For any scholarship that covers the full cost of attendance, you would need to pay taxes on the portion that covers room and board.</p>
<p>My DD is resident of one state and non-res in her college state; she still had to file a non-res state tax return for her monies ‘earned’ via scholarships that exceed tuition. Our accountant said that state would claim she earned the money in that state since the school was in that state</p>
<p>hovermom, TY, but that is the website I searched for hours with no results. There is nothing there about taxable scholarships/grants, unlike the MA website. I had to wait until Monday to call and get an answer, NYS just pretty much follows the federal return, whatever you put in the federal return, you put in the state, no direction as to how to list the grant, not even from the phone person! So, it was decided that I could list it the same way I listed it in the federal, and hope that it goes through ok. Unreal.<br>
The only good thing is that I can get the federal tuition deduction and a NYS credit, plus DTR can subtract the tax paid in MA from the tax owed in NY. I had to figure out two different ways to do the taxes for her and me in NYS and federal, plus MA for her, to come up with the most profitable way for us. By her paying taxes on 3000 worth of grants, I get about 590 bucks more in refunds than if she didn’t. Hopefully I did it right. She paid an unreal 770 on 6480 of work study and internship income and 6600 of taxable grant! Probably paid more taxes than some people in the Hamptons!</p>