USCGA Financial Changes

[phillipe]

I was reading past posts and had a few questions concerning Cadet's pay and expences.

I was talking to a one of my friends from high school (now a 4th class cadet at USCGA) and he told me that there were going to be a lot of financial changes starting next year. He said that the white card accounts were being removed and that cadets would be paid their full paycheck but that they would also have to pay for all uniforms, books, etc directly rather than charge it to their white card.

From the IRS Publication 970:

An appointment to a United States military academy is not a scholarship or fellowship. Payment you receive as a cadet or midshipman at an armed services academy is pay for personal services and will be reported to you in box 1 of Form W-2.

If a Cadet now receives their full paycheck - while having to pay for books, uniforms, etc., will that show as total income for them for IRS tax purposes?

Also, just having filed my income taxes , will I be able to claim my Cadet as a Dependent for tax purposes? Just curious.

 

[Objee]

If a Cadet now receives their full paycheck - while having to pay for books, uniforms, etc., will that show as total income for them for IRS tax purposes?

Cadets have always received their full paycheck...the funds were just distributed between two accounts prior to last year. In the past, one was managed by Cadet Finance (the "white card" account) and the other was their personal checking account. Now all the funds are just going directly to the personal checking account, but the entire salary was always (and will continue to be) reported on the W-2 form.

Also, just having filed my income taxes , will I be able to claim my Cadet as a Dependent for tax purposes? Just curious.

I think an accountant or maybe other parents on this forum are best suited to answer this question; however, I'm guessing the answer is no. Primarily because they're not a financial dependent of yours anymore, but also (even if you were still providing them financial support for some reason) because they're earning more than $3,800 a year and filing their own tax returns.

 

[LineInTheSand]

Cadets have always received their full paycheck...the funds were just distributed between two accounts prior to last year. In the past, one was managed by Cadet Finance (the "white card" account) and the other was their personal checking account. Now all the funds are just going directly to the personal checking account, but the entire salary was always (and will continue to be) reported on the W-2 form.



I think an accountant or maybe other parents on this forum are best suited to answer this question; however, I'm guessing the answer is no. Primarily because they're not a financial dependent of yours anymore, but also (even if you were still providing them financial support for some reason) because they're earning more than $3,800 a year and filing their own tax returns.

Many of us were listed as dependents while we were cadets. Granted that was 11 years ago for me, and I can't now remember if that was only for 4/c year or the entire 4 years....

That doesn't really answer the question, I know, but it leaves the door open for some tax pro CPA to answer....

 

[Luigi59]

Cadets have always received their full paycheck...the funds were just distributed between two accounts prior to last year. In the past, one was managed by Cadet Finance (the "white card" account) and the other was their personal checking account. Now all the funds are just going directly to the personal checking account,

No more Money Ninja?

Many of us were listed as dependents while we were cadets.

It's really only in question for the 4/c year. All other years, they are not dependents whatsoever.

However, in their 4/c year if you provide over half of their support, and they lived with you for at least half of the year, they can be claimed as dependents on a parent's return as long as they do not claim themselves on their own return.

 

[Packer]

Cadets have always received their full paycheck...the funds were just distributed between two accounts prior to last year. In the past, one was managed by Cadet Finance (the "white card" account) and the other was their personal checking account. Now all the funds are just going directly to the personal checking account, but the entire salary was always (and will continue to be) reported on the W-2 form.

Sounds like a good change to me.

 

[USCGA13STN]

Having our own money and being able to manage it IS great, except for when you get thrown into the "here by 700$ worth of stuff right now." And your paycheck is still only 600$ at the beginning of the month.

So long as you're told in advance what to buy it works out... when the system forgets to inform you until three days before... then it can sometimes be a challenge.

That being said, Luigi is completely right, they can be claimed as dependents 4/c year but only if they don't file their own return.

 

[kinnem]

Having our own money and being able to manage it IS great, except for when you get thrown into the "here by 700$ worth of stuff right now." And your paycheck is still only 600$ at the beginning of the month.

So long as you're told in advance what to buy it works out... when the system forgets to inform you until three days before... then it can sometimes be a challenge.

That being said, Luigi is completely right, they can be claimed as dependents 4/c year but only if they don't file their own return.

Not entirely accurate. They could be taken as dependents even if the kid filed their own return. The kid just can't take the standard deduction, since their parents are claiming it.