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(Vanity)Tax question regarding financial aid for college
freerepublic.com | 1/24/11 | GQuagmire

Posted on 01/24/2011 10:20:08 AM PST by GQuagmire

Does financial aid count as reportable income to the parents of a college student?


TOPICS: Business/Economy; Education; Miscellaneous
KEYWORDS: financialaid; taxes
With out getting into details unless needed any answer to the question are greatly appreciated. Thank you
1 posted on 01/24/2011 10:20:10 AM PST by GQuagmire
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To: GQuagmire

It’s a loan, not income.


2 posted on 01/24/2011 10:22:45 AM PST by MetaThought
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To: MetaThought

Update: some aid, some grants


3 posted on 01/24/2011 10:26:26 AM PST by GQuagmire (Hey now!)
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To: GQuagmire
Nope. It is given directly to the student. As long as certain requirements are met, it is not considered taxable income.

http://www.irs.gov/publications/p970/ch01.html#en_US_publink1000177987

4 posted on 01/24/2011 10:29:14 AM PST by crusty old prospector
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To: GQuagmire
When my daughter was in college, if the money went directly to her to use as she saw fit yes, if it went to the college to deffer costs no.
I am amusing you are talking grants. If you are talking loans, no.
5 posted on 01/24/2011 10:32:23 AM PST by svcw (God doesn't show up in our time, but He shows up on time)
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To: GQuagmire
You should read the Vox Day article about student loans, on World Net Daily; he's got a great point about being a debt slave, indentured to the student loan people forever.

So, while I have no answer to your question, I try to flag the very real dangers about willy nilly college debt to everyone.

All the best to your child, though!

6 posted on 01/24/2011 10:55:51 AM PST by elk
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To: elk

We made sure the costs when she’s done aren’t ridiculous.
She’s not going to an Ivy League school.
This potential tax liability is a surprise if hold up to be true, but in the grand scheme of things it won’t be a dealbreaker.

Thank you for the kind wishes to my daughter!


7 posted on 01/24/2011 11:15:21 AM PST by GQuagmire (Hey now!)
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To: GQuagmire

In general the above advice is, to the best of my knowledge, correct. When you file your returns, there are some tax credits available. If you declare the student (who then cannot declare herself) there may be limitations on the tax credits depending on the actual situation. You’ll need to read carefully. This is pretty minor stuff compared to what would happen if grants counted as income.

Good luck to your college student.


8 posted on 01/24/2011 12:26:54 PM PST by organicchemist
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