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The following is general information regarding student financial aid and income taxes, which should be used by students when filling out their federal and state income tax forms.
- Any portion of grants and scholarships (such as PELL, Missouri State Grant, SEOG, CWSP, C of O Workstudy, C of O Grant, etc.) which pays for Cost of Education (tuition), fees and books is not taxable, and not includable as income on the student’s federal and state tax forms.
- Any portion of grants and scholarships (academic, athletic, Bonner, ROTC, etc.) which pays for room and board is taxable. In addition, for students who work on campus during the summer to pay for the coming year’s room and board, the value of that room and board ($5,000 for 2009, plus $1,785 for room and board during the 12-week Summer term) ($5,300 for 2010, plus $1,986 for room and board during the 12-week Summer term) is taxable because such work is considered an educational scholarship, and should be included as income as taxable scholarship on the student’s tax forms. Education loans are considered to be neither a grant nor a scholarship, and are not taxable.
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The IRS American Opportunity, Hope, or Lifetime Learning tax credits are available for 2009 for qualified educational expenses. The definition of a “qualified educational expense” varies between the credits. (Note the Health/Technology/Service fee is not a qualified expense for any of the credits.) Expenses for room and board do not normally qualify for the credits, but may qualify in 2009 under provisions of the Midwestern Disaster Area special rules. (http://www.cofo.edu/MidwestDisaster.asp) Also see the 1098-T FAQs and the instructions for IRS Form 8863.
- Any student financial aid described above which is determined to be taxable income should be included on the student’s federal and state tax returns, as required by law. The College does not employ either a tax accountant or an attorney, and therefore cannot offer individual tax-related counsel to students.
More information concerning scholarships can be found on the IRS website at www.IRS.gov.
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