AROTC Scholarship Payments Delayed indefinitely

nofodad said:
If your DS/DD has a national scholarship, you shouldn't have to pay upfront (I don't think). BTW each tuition bill we've gotten does not list the scholarship. DS' university explained that scholarships outside of the college are not listed, just don't freak (like I did) if you get that first bill and it's not listed, probably the school's policy.
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DS did get a national scholarship. We opted for room and board. Have not gotten paid for fall or spring 2014 (due tomorrow). Have not received book money but are receiving monthly stipend. Waiting patiently
 
That will be interesting when tax time rolls around, because by taking the R & B option it is considered taxable.
 
Everyone is in the same situation

cajuncarrier said:
Oh GREAT! Just what I need. More complications.:frown:
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It's complicated for everyone actually. DS uses scholarship money for tuition and even then it can become taxable if you have other scholarship funds that when added to the ROTC scholarship exceeds tuition. So you have to do the math every year. Even the definition of "year" has to be considered because when the university issues the 1098-T is typically uses an academic year and the IRS uses the calendar year. So the 1098-T can not be taken at face value as most years it won't match the calendar year payments. Then there are the "years" when there is only one semester of paid scholarship coming into play. Then there is CLIP which is taxable but CULP which is not. Pay for LDAC, etc. So yes it's complicated for everyone, and changes each year.
 
I agree with what paradoxer stated. The reason I said there maybe confusion is this is the scenario that I would dread.

College sends 1098 for their fall semester 2013. Since you don't want him locked out you pay the R &B.
That would be tax yr 2013.

Jan. 2014, AROTC finally pays the R & B amount for the fall semester. They than pay for Spring and Fall 14. You now have 2 yrs of R &B being paid in one tax yr. Increasing your tax burden.
That would be tax yr. 14.

Granted it may come out as a wash, but it would stink if that extra amount takes you into another tax level.

I am not a tax accountant, but than I also wonder if paid in Jan 2014, since it was for FY13, could you place it into your taxes for 13 even though it was paid in 14?

That is why I said, this will be interesting from a tax implication situation.
 
cajuncarrier said:
DS did get a national scholarship. We opted for room and board. Have not gotten paid for fall or spring 2014 (due tomorrow). Have not received book money but are receiving monthly stipend. Waiting patiently
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My son's MSI year he contracted the first week of school but we didn't get the room & board payment until he was done with the semester and it was a few days before christmas. This year he got his recently.

Hopefully you get paid for the Fall semester soon.

As far as the spring semester is concerned, those will always come in the spring semester. They seem to be much quicker in paying the spring semesters, usually around mid Feb. if I remember correctly.
 
I guess I never really thought about all of the different aspects that come into play with receiving the scholarship if the payments aren't on time. Thanks for giving me a heads up. It would be great if it came in 2013.
 
DS is also taking the R&B option. Does he claim it on his taxes or do we? I knew R&B was taxable, but didn't think about who would claim it.
 
Pima said:
..... I also wonder if paid in Jan 2014, since it was for FY13, could you place it into your taxes for 13 even though it was paid in 14
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It would go in 2014 since that is when the cash was actually received.
 
MtnMom said:
DS is also taking the R&B option. Does he claim it on his taxes or do we? I knew R&B was taxable, but didn't think about who would claim it.
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He claims it. My DS owed @$850 tax year 2012 b/c his fall semester 2011 posted in January 2012. For tax year 2011, I took the education tax credit and we got a larger refund...then "paid for it" in tax year 2012.

When filing for 2012, we ran the numbers two ways, him as a dependent and a single filer (the self-sufficiency tests are grey for full-scholarship students). Turbo tax managed the 1098T well. We had some trouble working it in H&R block tax cut. Historically, the latter is free through military one source http://www.militaryonesource.mil/ but I have not read anything about 2013.

We ended up writing the $850 check for his taxes since claiming him decreased our tax burden by @$1,000
 
@MtnMom and cajuncarrier

It depends. There are income limits and dependency rules that determine if your kids MUST file separately. It could be you end up where you have a choice. If that's the case then you can game the scenario either way to see which way maximizes returns or minimizes taxes owed. Of course who actually cuts checks in the latter case doesn't matter. The IRS doesn't care whose name is on the check, just that they got one.
 
+1 to Kinnem.

You could end up where your DS qualifies to be taken as a dependent on the parent's tax return, but they still may have to file their own tax return if they exceed the minimum income threshold for having to file a return. It puts you in a position of having to calculate whether it's better for the parent to take them as a dependent (assuming they are eligible to do so) so that they are eligible to take any education credits (assuming you aren't running up against any AGI limitations for the credit), or whether you should forgo taking him as a dependent and letting the cadet take the credit on their own return.
 
OMG!!! So confusing!! Lots to consider. I guess I'll have to leave that up to the professionals..:eek:
 
My mantra the last couple of years - to keep from pulling my hair out as I tried to organize the data and run the various tax scenarios -

"these are good problems to have".
 
Well, DS scholarship money for Fall semester was finally received by the university this week. What a relief! As usual, the members of this board were correct. If we have learned nothing else from our short experience with the military/ROTC, its the hurry up and wait mantra.:wink:
 
Hallelujah!!:biggrin: Fall room and board were posted to DS's bank account. Wonderful Christmas present. Thanks all for the support.
 
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