ROTC Housing Choice

Future2LtMom said:
Do you happen to know which IRS publication your accountant is relying on regarding the taxability of the R&B? The only one I'm aware of is Pub. 970 and it specifically states that R&B is taxable. I would love to find a way to get around paying tax on it.

Thanks in advance for your help!
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I don't want to stir the pot, but there are different interpretations of what is taxable and what isn't (I've noted all kinds of differences from one ROTC to next-practice, operational, etc.).

I've just begun education with DS and it seems there are some perplexing workings. As I've said, we're just starting so I'll see the tax implications soon, yet the current plan of applying to R&B seems quite lucrative. His paperwork applied scholarship to R&B and his other scholarships will cover tuition.

PM me and I'll keep you in the loop once I see the final bill and speak with a tax accountant (I used to do it, but may forgo it for one year).
 
cajuncarrier said:
Yes he does get 5K a semester. whether it costs that much are not. He can use the extra on whatever he wants. My understanding is that they will pay the school's tuition or you get a set amount for R&B. I guess that number would vary depending on the more expensive school. We chose the R&B options because DS has other scholarships that pay for only tuition. So he would lose money if he did not take R&B.
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The cadet may not actually get the full $5,000 per semester. It all depends on housing costs at the school and whether or not the cadet lives off campus.

If the cadet lives on campus, the can choose whatever dorm they want as well as whatever meal plan they want. The scholarship will cover all the costs up until $5,000 per semester. If the most expensive dorm and meal plan lets say only cost $4,850, then that is what they pay. If it's $5,800, then the cadet gets $5,000. If the cadet doesn't chose a meal plan, then they pay the cost of the dorm fees and pay the average meal plan.

If the cadet lives off campus, then it's completely different. They actually average what the cost of housing is in the area that the school is located as well as the middle of the meal plan at the school and that is what the cadet gets. It doesn't always add up to $5,000. Two years ago, I guess the average housing where my son went along with the average meal plan didn't add up to $5,000. He actually got less when he moved off campus than his freshman year!
 
cjs said:
The cadet may not actually get the full $5,000 per semester. It all depends on housing costs at the school and whether or not the cadet lives off campus.

If the cadet lives on campus, the can choose whatever dorm they want as well as whatever meal plan they want. The scholarship will cover all the costs up until $5,000 per semester. If the most expensive dorm and meal plan lets say only cost $4,850, then that is what they pay. If it's $5,800, then the cadet gets $5,000. If the cadet doesn't chose a meal plan, then they pay the cost of the dorm fees and pay the average meal plan.

If the cadet lives off campus, then it's completely different. They actually average what the cost of housing is in the area that the school is located as well as the middle of the meal plan at the school and that is what the cadet gets. It doesn't always add up to $5,000. Two years ago, I guess the average housing where my son went along with the average meal plan didn't add up to $5,000. He actually got less when he moved off campus than his freshman year!
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At DS's school, if you choose R&B the money is paid to you and not the school, dorm or off campus. I did mention that costs differ from school to school. I was just talking about my son's school.
 
cajuncarrier said:
At DS's school, if you choose R&B the money is paid to you and not the school, dorm or off campus. I did mention that costs differ from school to school. I was just talking about my son's school.
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I didn't mean it in an offensive way. Just wanted others to know that it's not always the $5,000 no matter what.

They always pay it directly to the cadet. Actually reimburse seems to be more like it!
 
Yes you're right. Reimburse is more like it. First semester didn't come in until December even though DS contracted after his first PFT. Second semester was just 3 months after the start. So yes, be prepared!
 
When it cones to taxes I believe people are able to read into it differently. Some will play it safe, and that is something you should place into your equation when deciding which option to choose.

Plus on the stickies above there are schools that give some perks for room and board, and at that point your perspective might change on the route you take, especially if your college is like my kids where they pile all of the merit together and then subtract the amount, it could be that taking the tuition is a better bang for your buck because when you combine the discounts for room and board, than you could be better off.

What I find interesting is there are two scholarship parents with differing views on how they pay out the room and board aspect. One is saying it is exactly what the school charges and not one penny more. Another is saying the complete amount goes into their caccount and they get to keep the change.

I am not going to get into the debate, but either cjs is being rooked or Cajun is getting too much money. I would think AROTC has a directive somewhere to clarify how they pay it out for this option.
~ JMPO, but I doubt that it is up to the school decide whether or not to rebate the extra funds. I could see it as AROTC tweaked the payment along the way if their two kids are different year groups.
~~~ I.E. they deposited 5k per semester directly into the cadets account one year group, but for a different year group they paid their bursar account for room and board only charged to their account.

This would be a question to ask the det. If they only guarantee freshmen year in the dorm. Can you switch it as an MSII to tuition or are you committed for all four years room and board?
 
Pima said:
When it cones to taxes I believe people are able to read into it differently. Some will play it safe, and that is something you should place into your equation when deciding which option to choose.

Plus on the stickies above there are schools that give some perks for room and board, and at that point your perspective might change on the route you take, especially if your college is like my kids where they pile all of the merit together and then subtract the amount, it could be that taking the tuition is a better bang for your buck because when you combine the discounts for room and board, than you could be better off.

What I find interesting is there are two scholarship parents with differing views on how they pay out the room and board aspect. One is saying it is exactly what the school charges and not one penny more. Another is saying the complete amount goes into their caccount and they get to keep the change.

I am not going to get into the debate, but either cjs is being rooked or Cajun is getting too much money. I would think AROTC has a directive somewhere to clarify how they pay it out for this option.
~ JMPO, but I doubt that it is up to the school decide whether or not to rebate the extra funds. I could see it as AROTC tweaked the payment along the way if their two kids are different year groups.
~~~ I.E. they deposited 5k per semester directly into the cadets account one year group, but for a different year group they paid their bursar account for room and board only charged to their account.

This would be a question to ask the det. If they only guarantee freshmen year in the dorm. Can you switch it as an MSII to tuition or are you committed for all four years room and board?
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The school doesn't rebate the extra money, it's paid directly to the cadet. Unlike tuition, when you use it for R&B it's really more of a reimbursement kind of thing as it's paid so late in the fall semester. We had friends with kids at all different schools in Florida, both public and private and it was handled the same way for all of them who used the scholarship as R&B.

My son's freshman year he lived on campus in a dorm and had a meal plan. He had to give the receipts of what he did to HR at ROTC and that's exactly what he got. They wouldn't however pay you a dime over $5,000. He did not chose the most expensive dorm but did chose the most expensive meal plan and 4 years ago at his school, that did not add up to $5,000. It was something like $4,750 so that's what the Army directly deposited into his checking account.

What the HR person at his school explained to us his second year was it was handled a bit differently when they moved off campus. The Army figures out the average housing costs for the area that the school is located in and that is what they base their payment on. That and the average meal plan at the school.

He ended up getting just a tad less the first semester of his 2nd year because I guess the average housing and average meal plan was less than what he got the first year. By his senior year the cost had gone up to $4975 so that's what he got last year.

When I said it was "reimbursement" it was because he always got the payment just about at the very end of his Fall semester each year. Obviously payment was due for meal plans or housing or off campus prior to that, so we always had to put out the payment and wait to be paid back. Well, just the first semester because then the Fall payment went into savings to pay for the spring semester and so on...


He was not committed all 4 years to R&B. He actually filled out a new form each year as to how he wanted to use the scholarship.
 
I get that, but the way Cajun explained it was 5k per semester no matter what and you get to keep the change. See post#5 .
cajuncarrier said:
Yes he gets 5k a semester. Whether it costs that much or not. He can use the extra on whatever he wants[/quote=cajuncarrier]
~ R & B costs 4250, the cadet gets the differerence of 750.

Your explanation is it is reimbursement and do not look at the difference as "free money". Cajun is saying they get the flat 5k regardless.

This is what USMAROTC asked in the 4th post of this thread regarding if it comes down to costing 7500 a year, can they use that 2500 to offset other costs?

You said NO. You will be reimbursed for room and board only... UP TO 10K.

Cajun said YES. Paraphrasing post #5 her DS can spend the difference on whatever he wants to the 10k limit regardless of the bill from the college.

I get reimbursement, but one of you has to be wrong according to your posts. IF AROTC does reimbursement than it is up to 5K a semester, 4,349 and you get 4,349. According to cajun you submit the bill and than you get to keep the difference of 651 in your pocket!

Just curious which one it is because I am getting some cadets would opt for the less expensive dorm and meal plan if it meant more money in their pocket every semester, even if it meant if was just reimbursement at the end of each semester.
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cjs^^That should be a Sticky thread on how R&B payments are handled, both my son's took the scholarship for tuition and I never really understood the R&B option....I do now, thanks.

With the little I knew about the R&B option, they way cjs explained it was how we were told it worked.
 
ok to clear up some confusion. this is how DS's situation is. That's all I'm saying, not that it is the same for everyone. I was just sharing OUR experience with housing options. By NO WAY am I an expert on matters of ROTC and I definitely do not claim to be. I know things vary from school to school. This is how it has worked out for him:

MSI year DS was housed in a freshman only engineering dorm. He took the R&B option because his tuition and fees were covered by other scholarships. His first semester was not paid until December. So we had to pay for the first semester housing and were "reimbursed" for the fall into his personal checking account. No money was sent to the school from ROTC and we did not have to show any receipts. That payment was 5k. He was told that was the average for his school. And they were correct. He did not profit at all. ROTC is accurate in their figuring of R&B. And actually, we had to pay about $425 for his meal plan that wasn't covered by the 5k. Spring was the same thing, but DS received the payment in about March.

MS II year, presently, DS opted to live in an apartment off campus. He couldn't live in the same dorm because it was a freshman only dorm, but he could have chosen another. He wanted to be with 3 other ROTC buddies. He did have to fill out more paperwork and chose the R&B option. Again, he was told that he would receive 5k for the fall semester to cover housing and meal plan. Again, this will be delivered into his personal account. So we paid for his apartment and meal plan out of our pockets. He was told that after so many days of attending class, he will receive this payment. It will come out that the 5k will not even cover the complete cost. We will be responsible for about $185.

So it is my understanding that the 5k is for him to spend on his R&B as he sees fit. I don't know, for example, if he chose to live at home if that would even be an option. He receives the 5k for R&B for fall and spring AND uses every penny of it on R&B.

I hope this clears up some of the confusion. If not, please ask me to clarify OUR experience on this matter. And I am so sorry if I mislead anyone to believe anything differently that what was explained above.
 
cajuncarrier said:
ok to clear up some confusion. this is how DS's situation is. That's all I'm saying, not that it is the same for everyone. I was just sharing OUR experience with housing options. By NO WAY am I an expert on matters of ROTC and I definitely do not claim to be. I know things vary from school to school. This is how it has worked out for him:

MSI year DS was housed in a freshman only engineering dorm. He took the R&B option because his tuition and fees were covered by other scholarships. His first semester was not paid until December. So we had to pay for the first semester housing and were "reimbursed" for the fall into his personal checking account. No money was sent to the school from ROTC and we did not have to show any receipts. That payment was 5k. He was told that was the average for his school. And they were correct. He did not profit at all. ROTC is accurate in their figuring of R&B. And actually, we had to pay about $425 for his meal plan that wasn't covered by the 5k. Spring was the same thing, but DS received the payment in about March.

MS II year, presently, DS opted to live in an apartment off campus. He couldn't live in the same dorm because it was a freshman only dorm, but he could have chosen another. He wanted to be with 3 other ROTC buddies. He did have to fill out more paperwork and chose the R&B option. Again, he was told that he would receive 5k for the fall semester to cover housing and meal plan. Again, this will be delivered into his personal account. So we paid for his apartment and meal plan out of our pockets. He was told that after so many days of attending class, he will receive this payment. It will come out that the 5k will not even cover the complete cost. We will be responsible for about $185.

So it is my understanding that the 5k is for him to spend on his R&B as he sees fit. I don't know, for example, if he chose to live at home if that would even be an option. He receives the 5k for R&B for fall and spring AND uses every penny of it on R&B.

I hope this clears up some of the confusion. If not, please ask me to clarify OUR experience on this matter. And I am so sorry if I mislead anyone to believe anything differently that what was explained above.
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That makes perfect sense.

I think that some confusion arose when there was a thought that the cadet could pocket extra R&B money if they lived on campus, your post clearly shows that is not the case.

The fact that you received the max allowable was because that was the average for your school, nothing odd there.

Now as you have pointed out things change when you live off campus. There were cadet friends of my son that lived together off campus and took their scholarships for R&B. The amount, that average you talked about, they received was more then they spent and they just kept the rest.

I have to ask, the cost of living must be higher where your son goes to school if $10,000 per year doesn't cover the expenses off campus.

Thanks for the great explanation, between you and cjs it really explained it well.
 
The cost of his apartment is like $90 cheaper than the dorm. He chose a commuter meal plan so that he can have lunch on campus. That is like $240 cheaper than the plan he had last year. So living off campus is a little cheaper, but when you add the groceries he needs in his apartment, it will actually be more expensive. But DS is really frugal. He lives within his means. So I didn't have a problem with him living off campus.

Plus the price for the apartment covers the summer months as well while his dorm amount did not. So I guess it is cheaper if you figure that in too.
 
I just looked up the last payment that was deposited into my son's checking account for the last 3 semesters for R&B. As he has graduated and commissioned, this past spring was the last of his scholarship money.

My son was at University of Florida. His last 3 direct deposits for the housing portion of his scholarship from Army ROTC were as follows:
3/13 - $4,554.50
11/27/13 - $4,670.00
3/19/14 - $4,670.00

Guess that what the Army decided was the average housing and meal plan values at his school. It's shy of the $5,000.

I figured that this may be helpful to someone else and it will also give an idea of the timing of having the scholarship paid if someone choses to use it for R&B. Any of friends who used the scholarship the same way, whether at private or public had the money deposited right around the same time.

The rent for the house he lived in was $500 per month for 12 months (he had to sign a yearly lease) so $6,000 per year went towards just the rent. Of course there were utility bills on top of that. He wasn't around during the summers as he did CULP, LDAC, CTLT, etc. but rent still needed to be paid. Another $120 per month went towards utilities so after it all he had $1,900 left for food for both semesters.
 
This was my point earlier. That 10K is great, but do not ASSUME it will cover everything, and because of tax implications it might not equal = 10 K after taxes.

Take the time now by being proactive and decide the best option.
~ It will be hard to do currently because you have no idea of the merit awards they will receive.
 
cajuncarrier said:
I read that too before taxes this year and specifically told my accountant. But he said it wasn't in my case. I'm not a tax person so I feel he knows more than me. And he did work for IRS, so I trust him. Although, I still wonder. Thanks for sharing.
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IRS Publication 970, Page 39 -- Scholarship funds paid toward Room and Board are taxable. Room and Board is not a qualified educational expense for which a tax-free scholarship can be applied. To quote:

"Expenses That Do Not Qualify. Qualified education expenses do not include amounts paid for:
Insurance,
Medical expenses (including student health fees),
Room and board,
Transportation, or
Similar personal, living, or family expenses.This is true even if the amount must be paid to the institution as a condition of enrollment or attendance."
 
That seems to be very clear and straight forward with no wiggle room for misunderstanding.
 
"Expenses That Do Not Qualify. Qualified education expenses do not include amounts paid for:
Insurance,
Medical expenses (including student health fees),
Room and board,
Transportation, or
Similar personal, living, or family expenses.This is true even if the amount must be paid to the institution as a condition of enrollment or attendance."

Ok..... So those folks using 529 plan monies to pay the above are violating the law??? Oh boy....:eek:
 
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