I just thought I would relay a bit of information after talking with my MS3 son.
Last semester he took an Arabic Language Class. The class was 4 credits plus 1 credit for the language lab. The total, 5 credits.
All the forms were filled out and their amazing admin person made sure everything was submitted. There were about 4 cadets that took language classes that fell under CLIP.
About 3 days ago he received money into his account in the amount of $1026.00 He thought this was an odd amount since it was the same date he was to get his stipend.
Today he received a tax statement showing the CLIP as $1250.00 and The Stipend as $225.00 added together for a total of $1475.00. They took out $346.00 for federal Tax and $96.00 for State Tax. The state tax seemed odd since he is attending an out of state university and is not a residence of that state, still need to figure that one out.
When he talked to the Admin person he said that because the total paid at one time was over $1000.00 it now becomes taxable. Normal stipend amounts will not be taxable.
So...a word of warning to any cadet doing CLIP or any other program that pays you. If a total payment is over $1000.00 at anytime be prepared to have taxes taken out.
In the end it is not that big of an issue since he will get it all back as a tax refund, it just came to him as a surprise.
I just thought I would share this for anyone out there that might find themselves in the same situation.
Always something new....you just have to roll with it.
Last semester he took an Arabic Language Class. The class was 4 credits plus 1 credit for the language lab. The total, 5 credits.
All the forms were filled out and their amazing admin person made sure everything was submitted. There were about 4 cadets that took language classes that fell under CLIP.
About 3 days ago he received money into his account in the amount of $1026.00 He thought this was an odd amount since it was the same date he was to get his stipend.
Today he received a tax statement showing the CLIP as $1250.00 and The Stipend as $225.00 added together for a total of $1475.00. They took out $346.00 for federal Tax and $96.00 for State Tax. The state tax seemed odd since he is attending an out of state university and is not a residence of that state, still need to figure that one out.
When he talked to the Admin person he said that because the total paid at one time was over $1000.00 it now becomes taxable. Normal stipend amounts will not be taxable.
So...a word of warning to any cadet doing CLIP or any other program that pays you. If a total payment is over $1000.00 at anytime be prepared to have taxes taken out.
In the end it is not that big of an issue since he will get it all back as a tax refund, it just came to him as a surprise.
I just thought I would share this for anyone out there that might find themselves in the same situation.
Always something new....you just have to roll with it.