FundSvcs Community

Interesting article was published in CNBC yesterday. https://www.cnbc.com/2019/03/11/you-might-owe-taxes-if-you-got-a-scholarship.html It states, "Two conditions must apply in order for a scholarship or fellowship to be tax-free, according to the IRS. 1. You're a degree-candidate at an educational institution that maintains a regular faculty and curriculum. The school must have a regularly enrolled body of students in attendance. 2. The money you receive is used to pay for tuition and fees necessary for enrollment or for books, fees, supplies and equipment needed for courses. Scholarships that cover incidental expenses, including room, board and travel are taxable." "If a school offers a student money that's considered taxable income — perhaps as part of a teaching assistantship or fellowship — then it must provide the student with a Form W-2, reporting taxes withheld." I've understood that typically graduate fellowships which allow funds to be spent on incidentals are taxable, but haven't stopped to think that an undergraduate scholarship primarily for tuition and fees, but that also permitted funds to be used for meals, housing, or travel would flag the need for a w-2 to be issued to the student. Has anyone reviewed their scholarship gift agreements and scholarship account purposes to see if they are permitted for use towards meals, housing, or travel? If so, is your school issuing W-2's to these award recipients? Thanks, Eric AVP, Advancement Services University of Hawaii Foundation

This is all outlined in IRS Publication 970 - I mentioned it was recently updated on the download site. And, yes, I worried about whether the benefits were taxable going back to my oversite of these when I was at Duke in the 1990s (and did so as well at NC State). In the main, we did not allow any taxable benefits to be included in our agreements. When there were taxable income identified, 1099s were used - not W-s2. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Tue, Mar 12, 2019 at 4:48 PM Eric Valdescaro < eric.valdescaro@uhfoundation.org> wrote: > Interesting article was published in CNBC yesterday. > > https://www.cnbc.com/2019/03/11/you-might-owe-taxes-if-you-got-a-scholarship.html > > It states, "Two conditions must apply in order for a scholarship or > fellowship to be tax-free, according to the IRS. > 1. You're a degree-candidate at an educational institution that maintains > a regular faculty and curriculum. The school must have a regularly enrolled > body of students in attendance. > 2. The money you receive is used to pay for tuition and fees necessary for > enrollment or for books, fees, supplies and equipment needed for courses. > > Scholarships that cover incidental expenses, including room, board and > travel are taxable." > > "If a school offers a student money that's considered taxable income — > perhaps as part of a teaching assistantship or fellowship — then it must > provide the student with a Form W-2, reporting taxes withheld." > > I've understood that typically graduate fellowships which allow funds to > be spent on incidentals are taxable, but haven't stopped to think that an > undergraduate scholarship primarily for tuition and fees, but that also > permitted funds to be used for meals, housing, or travel would flag the > need for a w-2 to be issued to the student. > > Has anyone reviewed their scholarship gift agreements and scholarship > account purposes to see if they are permitted for use towards meals, > housing, or travel? If so, is your school issuing W-2's to these award > recipients? > > Thanks, > Eric > > AVP, Advancement Services > University of Hawaii Foundation >

Thanks. Will be taking a look at 970. Best, Eric From: Advancement Services Discussion List [mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG] On Behalf Of John Taylor Sent: Tuesday, March 12, 2019 10:53 AM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: Re: [FUNDSVCS] Taxable scholarships? This is all outlined in IRS Publication 970 - I mentioned it was recently updated on the download site. And, yes, I worried about whether the benefits were taxable going back to my oversite of these when I was at Duke in the 1990s (and did so as well at NC State). In the main, we did not allow any taxable benefits to be included in our agreements. When there were taxable income identified, 1099s were used - not W-s2. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Tue, Mar 12, 2019 at 4:48 PM Eric Valdescaro <eric.valdescaro@uhfoundation.org<mailto:eric.valdescaro@uhfoundation.org>> wrote: Interesting article was published in CNBC yesterday. https://www.cnbc.com/2019/03/11/you-might-owe-taxes-if-you-got-a-scholarship.html It states, "Two conditions must apply in order for a scholarship or fellowship to be tax-free, according to the IRS. 1. You're a degree-candidate at an educational institution that maintains a regular faculty and curriculum. The school must have a regularly enrolled body of students in attendance. 2. The money you receive is used to pay for tuition and fees necessary for enrollment or for books, fees, supplies and equipment needed for courses. Scholarships that cover incidental expenses, including room, board and travel are taxable." "If a school offers a student money that's considered taxable income — perhaps as part of a teaching assistantship or fellowship — then it must provide the student with a Form W-2, reporting taxes withheld." I've understood that typically graduate fellowships which allow funds to be spent on incidentals are taxable, but haven't stopped to think that an undergraduate scholarship primarily for tuition and fees, but that also permitted funds to be used for meals, housing, or travel would flag the need for a w-2 to be issued to the student. Has anyone reviewed their scholarship gift agreements and scholarship account purposes to see if they are permitted for use towards meals, housing, or travel? If so, is your school issuing W-2's to these award recipients? Thanks, Eric AVP, Advancement Services University of Hawaii Foundation This message (including any attachments) is covered by the Electronic Communications Privacy Act, 18 U.S.C. 2510-2521. It is the property of the University of Hawaii Foundation. It may contain confidential information intended for a specific individual and purpose. If you are not the intended recipient, you must delete this message. You are hereby notified that any disclosure, copying, or distribution of this message is prohibited.