FAFSA ROTC & Taxes

nature boy

nature boy

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Oct 6, 2019
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My Dad was asking me if he still needs to fill out the FAFSA stuff, since ROTC will be paying for tuition and the school I attend covers room and board. Does anyone know if ROTC cadet's parents still need to complete the FAFSA yearly? The other question he had was about taxes/claiming me as a dependent. Since I will only be home 10-12 weeks out of the year, for the next 3 years and he's not contributing to tuition, room or board, plus I will be receiving a monthly stipend. The question is will he still be able to consider me a dependent on his taxes?
 
My DS is in the same boat with the ROTC scholarship and room and board scholarship. His University's financial aid office required him to fill out the FAFSA regardless of the scholarships. Not sure about if that will be the case every year or not, but I assume so.

What I thought was odd is that they calculated his financial aid without it reflecting the scholarships or the fact that I am an employee at that university and get a large tuition cut. Kind of want to see my DS or the Army benefit from the fact that I work there. It one of the biggest perks employees get and half the reason I got a job at the university long before DS even thought about the military path or scholarships.
 
Yes, you still need to file the FAFSA.,

yes, you are still a dependent until you graduate. Right now, you want him to claim you if your family is eligible for the the stimulus and child tax credit.
 
I don't see a need to fill out the FAFSA if you are not seeking additional aid, unless the college requires it for some mysterious reason. Taxes will need to be paid on the room and board. As long as your parents cover 50% of your support (eg. Summer, holidays, clothing, etc) then they can still claim you as a dependant. This will certainly be the case your first year and perhaps the remaining years as well.

BTW, the tuition and stipend are not taxable and do not need to be reported.
 
nature boy said:
My Dad was asking me if he still needs to fill out the FAFSA stuff, since ROTC will be paying for tuition and the school I attend covers room and board. Does anyone know if ROTC cadet's parents still need to complete the FAFSA yearly? The other question he had was about taxes/claiming me as a dependent. Since I will only be home 10-12 weeks out of the year, for the next 3 years and he's not contributing to tuition, room or board, plus I will be receiving a monthly stipend. The question is will he still be able to consider me a dependent on his taxes?
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My DS will be 100% responsible for his college and living costs. The only way we will continue claiming him after this year is if he lives at home to attend the local school. That will only happen if he doesn't receive a scholarship. Otherwise, he will be independent and can claim himself.
 
WMTA said:
My DS will be 100% responsible for his college and living costs. The only way we will continue claiming him after this year is if he lives at home to attend the local school. That will only happen if he doesn't receive a scholarship. Otherwise, he will be independent and can claim himself.
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Just something to keep in mind. Your DS can still file his own taxes and not claim himself as a dependent, while you continue to claim him. Did this with my DS. He got refunds from summer employment because of his low income and I got to claim the deduction. You really need to work it both ways to see which way is best.
 
Thank you for the responses, I talked to my Dad again and he told me he wants me to check with the bursar's office at the school for clarification on the FAFSA.
 
kinnem said:
Just something to keep in mind. Your DS can still file his own taxes and not claim himself as a dependent, while you continue to claim him. Did this with my DS. He got refunds from summer employment because of his low income and I got to claim the deduction. You really need to work it both ways to see which way is best.
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"Your DS can still file his own taxes and not claim himself as a dependent" of you/his-parents, or not claim himself as a dependent of himself? I thought if kids file their own tax then we as parent won't be able to claim them as dependent(s) anymore.
 
kinnem said:
Taxes will need to be paid on the room and board.

BTW, the tuition and stipend are not taxable and do not need to be reported.
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I did my taxes this year and listed someone else can claim me as a dependent. My Dad entered the info from form 1098 E/T stuff in there that was listed in the boxes, the school provided me. Do I need another form? On my bill for this school year it lists room and board as a charge and then in the opposite column the exact same amount is credited. I think the school uses the school scholarships I am eligible for to cover the room/ board costs and the ROTC covers the tuition, beginning next year. Just about everyone here gets at least $10,000 in merit scholarships from the school, which is about what room and board costs.
 
Recommend you still complete the Fafsa to have a backup plan. What happens if for some reason you become disqualified for the scholarship. I've read many posts where individuals were medically dq'd during college. I would want a fafsa on record in case I need to ask the financial aid office to reevaluate my circumstance. Even if the financial aid office offers you work study or a student loan you can always decline. But I would recommend completing because of the What ifs....
On a side note, I claimed my DS on my taxes as a dependent. He still filed but indicated someone else could claim him.
 
I talked to my dad about the tax part. He said no matter if a parent pays anything to support a child or not you can still claim the child as a dependent. If the parent claims the child as a dependent then all the money received from Stipend and Scholarships will go under the dependent on the parent's taxes. He said it is actually better for the parent to keep the child as a dependent as long as possible. Also keep health insurance on the child as well. The reason for this is if something happens while in college that medically DQs the child then you will have medical insurance to pick it up. My Dad's friend even does this with his son that attends the USNA. You can do this up until the age of 26 or until the child gets a full time job that provides health insurance (ie: you get commissioned), which ever comes first.
 
Military Bound said:
I talked to my dad about the tax part. He said no matter if a parent pays anything to support a child or not you can still claim the child as a dependent. If the parent claims the child as a dependent then all the money received from Stipend and Scholarships will go under the dependent on the parent's taxes. He said it is actually better for the parent to keep the child as a dependent as long as possible. Also keep health insurance on the child as well. The reason for this is if something happens while in college that medically DQs the child then you will have medical insurance to pick it up. My Dad's friend even does this with his son that attends the USNA. You can do this up until the age of 26 or until the child gets a full time job that provides health insurance (ie: you get commissioned), which ever comes first.
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DS is in AROTC and this is what we did.. All the ROTC monies aren’t taxed but the room and board scholarship is.
 
THmom said:
DS is in AROTC and this is what we did.. All the ROTC monies aren’t taxed but the room and board scholarship is.
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+1 @THmom.

The IRS website is clear on this. Scholarships are not taxable when utilized for tuition, books and mandatory fees, but taxable on Room and Board. All things being equal, it is better to use the funds on tuition.

Source: From the IRS Topical website (retrieved 3/10/2021 from https://www.irs.gov/taxtopics/tc421 )

Tax-Free​

If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:

  • You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities; and
  • The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.

Taxable​

You must include in gross income:

  • Amounts used for incidental expenses, such as room and board, travel, and optional equipment.
  • Amounts received as payments for teaching, research, or other services required as a condition for receiving the scholarship or fellowship grant. However, you don't need to include in gross income any amounts you receive for services that are required by the National Health Service Corps Scholarship Program, the Armed Forces Health Professions Scholarship and Financial Assistance Program, or a comprehensive student work-learning-service program (as defined in section 448(e) of the Higher Education Act of 1965) operated by a work college.
Source: https://www.irs.gov/taxtopics/tc421
 
pwell said:
"Your DS can still file his own taxes and not claim himself as a dependent" of you/his-parents, or not claim himself as a dependent of himself? I thought if kids file their own tax then we as parent won't be able to claim them as dependent(s) anymore.
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Incorrect. Even while in high school we (and when I was a kid, my parents) did this. You can include the kids money on your tax return as well if you prefer, but doing their own taxes doesn't mean they aren't a dependent. In fact one of the initial questions in the tax form is "Can (will?) anyone claim you as a dependent", hence one can file taxes without declaring themselves as a dependent.
 
AROTC-dad said:
+1 @THmom.

The IRS website is clear on this. Scholarships are not taxable when utilized for tuition, books and mandatory fees, but taxable on Room and Board. All things being equal, it is better to use the funds on tuition.

Source: From the IRS Topical website (retrieved 3/10/2021 from https://www.irs.gov/taxtopics/tc421 )

Tax-Free​

If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:

  • You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities; and
  • The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.

Taxable​

You must include in gross income:

  • Amounts used for incidental expenses, such as room and board, travel, and optional equipment.
  • Amounts received as payments for teaching, research, or other services required as a condition for receiving the scholarship or fellowship grant. However, you don't need to include in gross income any amounts you receive for services that are required by the National Health Service Corps Scholarship Program, the Armed Forces Health Professions Scholarship and Financial Assistance Program, or a comprehensive student work-learning-service program (as defined in section 448(e) of the Higher Education Act of 1965) operated by a work college.
Source: https://www.irs.gov/taxtopics/tc421
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But if their total income (and taxable scholarship) is less than $12,200 then they still don't have to file, correct?
 
unkown1961 said:
But if their total income (and taxable scholarship) is less than $12,200 then they still don't have to file, correct?
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You bring up a good point. Most cadet/mids are in a very low tax bracket if at all. My DS worked two jobs while at college and receiving an Army ROTC scholarship. There was no question that using the funds for tuition was the best option for him.

To be certain of which direction to go, consult with your tax advisor for your specific situation.
 
kinnem said:
Incorrect. Even while in high school we (and when I was a kid, my parents) did this. You can include the kids money on your tax return as well if you prefer, but doing their own taxes doesn't mean they aren't a dependent. In fact one of the initial questions in the tax form is "Can (will?) anyone claim you as a dependent", hence one can file taxes without declaring themselves as a dependent.
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Thanks! I assume if a kid can file his/her tax and pay lower tax, parents should not include kid's income (while claiming them as dependent) to avoid paying double tax. DS is getting both ROTC Type-1 and some substaintial merit scholarships from a couple schools (which can be used for room and board), so we will try to have him file a tax return for 2021.
 
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