Can someone tell me how cadet pay is reported on a year-end statement? My 4th year received their W2 which seems minimal and only roughly the amount of pay they receive. Is the tuition, room, board, etc reported in any manner in their name? (i.e. 1098, 1099, etc.) I am trying to understand how we would not be eligible to write them off when their W2 is only roughly $6k?
2013 W2s
- Thread starter USAFAmom1
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I claimed my DS his Freshman year at USAFA because I supported him for half the year which included private school tuition etc... It all depends on how comfortable you or your accountant feel about claiming him/her. The rule of thumb is if you housed/fed/clothed/paid his tuition to private school etc...at least half the year before he went off to USAFA you could claim him/her. But the following years, I did not claim him as a dependent because obviously I did not pay a cent for his college education. Most parents who did not have private school tuition for HS did not claim their DS/DD. In an IRS audit....you should be able to prove you supported at least half the year of the year they entered USAFA etc...The amount of money that costs the Government to house/feed a cadet including tuition equivalent is pretty high for even half the year. So in their W2, it will not reflect those costs....only the money they receive for cadet pay status. Remember....one years worth of education at USAFA is around $100K...so if you can prove your dependent in your household costs you around $50K in an audit, no problem.
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The following memo is from 2008, but I think it is the best description of what is provided by an academy that must be counted as support. The dollar figures will only have gotten bigger. It is also from West Point, but the federal laws apply the same. While my son was at USAFA the Superintendent provided the dollar figure in a memo to parents in the first newsletter of the year. We did not claim him as a dependent any of the 4 years that he was there.
MEMORANDUM FOR FOURTH CLASS CADETS
SUBJECT: Income Tax Information
1. Many of you as fourth class cadets have questions concerning the income tax consequences of cadet pay and allowances. This memo provides information from the standpoint of both your tax return and your parents’ return for 2008. It is very important that you share this data with your parents.
2. This memo is based on the tax laws and current rulings of treasury officials. It is, however, informative only and does not necessarily reflect the official position of the Internal Revenue Service or the Department of the Army.
3. All cadets at the Academy must file their own income tax returns. Each fourth class cadet who entered the Academy on 30 June 2008, and remained through 31 December 2008, has received or had credited to their account during 2008 base pay of $5,395.61. Cadets must report this amount as income from the Army. In addition, each cadet received a $5,400.00 pay advance to assist with the payments of uniforms, textbooks, computer, software and various school fees.
4. Your parent(s)/guardian(s) must have contributed more than half of your support for the year in order to claim you as an income tax exemption “More than half the support” refers to dollar value, and not to the length of time support was furnished. Your parent or guardian may properly include the cost of board, clothing, lodging, medical and dental care, education, property and furniture, insurance, etc., they furnished you when they calculated their level of support. If you lived at home during the first six months of 2008, your parent or guardian may include a proportionate amount of the family food bill, utilities, rent or house payments, interest, taxes, etc., as part of your support. If you attended college, prep school, or high school prior to entering the Military Academy, your parents may also include the amount they paid for tuition, books, school supplies, and transportation to and from school as parental support.
5. In determining the value of support furnished from sources other than your parents, you must include both taxed and untaxed support amounts. This simply means that the portion of your taxable pay spent on your own support must be included, and in addition, the support provided by the Army in the form of food, lodging, education and other services must also be included. Even though the value of Army support is not taxed as income, the value must be considered when determining who provided more than half of your support. The following chart indicates values of support furnished by yourself and by the Army.
MARM-FO-MA-T (1)
SUBJECT: Income Tax Information
Cadet Pay earned from 30 June through 31 December $5,395.61
Government Pay Advance 5,400.00
Subsistence (food) (92 days x $6.95 per day)
30 June through 30 September 639.40
(92 days x $9.80 per day)
1 October through 31 December 901.60
Room and Board (Half year per USMA’s FY08
Cost of Education Report) 1,714.50
Education (the actual 2008 tuition cost per semester
at the U.S Military Academy) 25,786.00
TOTAL SUPPORT BY THE CADET AND BY THE ARMY $39,837.11
6. In our opinion, if your parent has not provided at least $39,837.11 in support, then your parent may not be able to claim you as an exemption. If your parent has provided more than this amount in support, then your parent is entitled to claim you as an exemption. Under IRS regulations, if your parent can claim you, you cannot claim a personal exemption for yourself, and you will have to complete a worksheet to compute your standard deduction.
7. The question may arise whether an appointment to the Military Academy can be considered a “scholarship award” within the meaning of the income tax laws. The Internal Revenue Service has ruled that such an appointment is not a scholarship award and that the education provided by the Military Academy must, therefore, be included as an item of support furnished by the Army.
8. I trust that the information provided, although necessarily general in nature, will be of assistance to you and your family. The above information is provided to ensure that you and your parent(s)/guardian(s) have sufficient data to calculate income tax returns.
9. Any questions by your parent(s)/guardian(s) concerning the proper methods of calculating dependency should be resolved through independent legal counsel, Publication 17, and/or contact the Internal Revenue Service.
THOMAS M. REMO
Treasurer, USMA
MEMORANDUM FOR FOURTH CLASS CADETS
SUBJECT: Income Tax Information
1. Many of you as fourth class cadets have questions concerning the income tax consequences of cadet pay and allowances. This memo provides information from the standpoint of both your tax return and your parents’ return for 2008. It is very important that you share this data with your parents.
2. This memo is based on the tax laws and current rulings of treasury officials. It is, however, informative only and does not necessarily reflect the official position of the Internal Revenue Service or the Department of the Army.
3. All cadets at the Academy must file their own income tax returns. Each fourth class cadet who entered the Academy on 30 June 2008, and remained through 31 December 2008, has received or had credited to their account during 2008 base pay of $5,395.61. Cadets must report this amount as income from the Army. In addition, each cadet received a $5,400.00 pay advance to assist with the payments of uniforms, textbooks, computer, software and various school fees.
4. Your parent(s)/guardian(s) must have contributed more than half of your support for the year in order to claim you as an income tax exemption “More than half the support” refers to dollar value, and not to the length of time support was furnished. Your parent or guardian may properly include the cost of board, clothing, lodging, medical and dental care, education, property and furniture, insurance, etc., they furnished you when they calculated their level of support. If you lived at home during the first six months of 2008, your parent or guardian may include a proportionate amount of the family food bill, utilities, rent or house payments, interest, taxes, etc., as part of your support. If you attended college, prep school, or high school prior to entering the Military Academy, your parents may also include the amount they paid for tuition, books, school supplies, and transportation to and from school as parental support.
5. In determining the value of support furnished from sources other than your parents, you must include both taxed and untaxed support amounts. This simply means that the portion of your taxable pay spent on your own support must be included, and in addition, the support provided by the Army in the form of food, lodging, education and other services must also be included. Even though the value of Army support is not taxed as income, the value must be considered when determining who provided more than half of your support. The following chart indicates values of support furnished by yourself and by the Army.
MARM-FO-MA-T (1)
SUBJECT: Income Tax Information
Cadet Pay earned from 30 June through 31 December $5,395.61
Government Pay Advance 5,400.00
Subsistence (food) (92 days x $6.95 per day)
30 June through 30 September 639.40
(92 days x $9.80 per day)
1 October through 31 December 901.60
Room and Board (Half year per USMA’s FY08
Cost of Education Report) 1,714.50
Education (the actual 2008 tuition cost per semester
at the U.S Military Academy) 25,786.00
TOTAL SUPPORT BY THE CADET AND BY THE ARMY $39,837.11
6. In our opinion, if your parent has not provided at least $39,837.11 in support, then your parent may not be able to claim you as an exemption. If your parent has provided more than this amount in support, then your parent is entitled to claim you as an exemption. Under IRS regulations, if your parent can claim you, you cannot claim a personal exemption for yourself, and you will have to complete a worksheet to compute your standard deduction.
7. The question may arise whether an appointment to the Military Academy can be considered a “scholarship award” within the meaning of the income tax laws. The Internal Revenue Service has ruled that such an appointment is not a scholarship award and that the education provided by the Military Academy must, therefore, be included as an item of support furnished by the Army.
8. I trust that the information provided, although necessarily general in nature, will be of assistance to you and your family. The above information is provided to ensure that you and your parent(s)/guardian(s) have sufficient data to calculate income tax returns.
9. Any questions by your parent(s)/guardian(s) concerning the proper methods of calculating dependency should be resolved through independent legal counsel, Publication 17, and/or contact the Internal Revenue Service.
THOMAS M. REMO
Treasurer, USMA
