Federal tax laws now offer special benefits to help eligible students and families pay for higher education. For more information, we recommend IRS publication 970, “Tax Benefits For Education,” which may be found at http://www.irs.gov/pub/irs-pdf/p970.pdf or by calling the IRS at 1-800-829-3676 to place an order. The University of Redlands cannot provide tax advice. Please check with your tax advisor or the Internal Revenue Service for specific details about these benefits.
Types of Taxes
If you receive any outside grants or scholarships, all or part of the amount you receive may be treated as taxable income. Scholarships are tax-free only if: 1) you are a candidate for a degree at the University or another educational institution; and 2) you use the scholarship or grant for required tuition, fees, books, supplies and/or equipment that are required for your courses at that institution. Grants and scholarships designated or used for other purposes, such as room and board, typically cannot be excluded from income. Student loans are not scholarships and are generally tax-free.
Work-study earnings are taxable; appropriate taxes will be deducted from your pay checks by your employer. Work-study earnings must be reported to the IRS for tax purposes, but federal work-study will not be counted against your eligibility for financial aid when reported on the Free Application for Federal Student Aid (see FAFSA instructions). For further information, see the IRS Tax Information for Students website at www.irs.gov/individuals/students.
Some of the tuition you pay may qualify for the American Opportunity Credit or the Lifetime Learning Tax Credit programs. Please review your eligibility for these programs by discussing them with your tax advisor. More information can be found at studentaid.ed.gov/types/tax-benefits.
The Private College 529 Plan is a pre-paid tuition plan sponsored by more than 270 private colleges across the country. More information is available at cytu.gregorybgallagher.com/sfs/529plan.