Policies & Procedures: Student Aid Taxation
Taxation of Student Aid and Excluding Work-Study on the FAFSA
Federal tax legislation states that student aid in the form of grants "is taxable income, if aggregate scholarship amounts exceed tuition and fees (not including room and board), books, supplies, and equipment required..." In other words, if a student's grant aid is greater than the expenses listed above, the amount exceeding the expenses may be taxable income. In this case, "grant aid" includes student aid grants received from all sources, not just from Haverford.
The Internal Revenue Service (IRS) requires you to report grant amounts which exceed tuition, fees, books and supplies and to keep receipts to prove all expenses. Whether or not you will owe taxes on your grant aid will depend on your other income earned or received in the tax year and the amount of federal income taxes you have instructed your employers (including the Haverford College Business Office) to withhold from your wages. Since, according to current regulations, the Financial Aid Office is not qualified to give tax advice, we want to make it clear to anyone who asks us for this information that we are giving them only our understanding of the tax laws and that they should consult their tax advisor or the IRS for further details.
IRS tax forms and instructions are usually available at local post offices after January 1st and up to April 15th. You may also download forms and publications directly from the IRS Web Site. Pennsylvania State income tax forms are usually available at local public libraries (the Ardmore Free Library is on Ardmore Avenue just past the post office). For information on whether you must file a Pennsylvania Income Tax Return or your home state's return, please contact the Commonwealth of Pennsylvania-Department of Revenue and your state's tax department. Most phone books list toll-free numbers you can use to contact the IRS or any state tax bureau.
Federal Department of Education regulations require students to exclude job earnings from the Federal Work-Study Program or any other need-based work programs by entering them on the FAFSA. Please see the instructions on the FAFSA (and the Worksheet at the back of the FAFSA) which describe this policy in detail. Any Work-Study listed on your Financial Aid Decision (i.e. either Federal or Haverford) can be considered "need-based" for this purpose. Actual amounts earned are listed on your W-2 form sent to you by the Haverford College Business Office. You must also refer questions about the amount of income taxes withheld from your Work-Study wages to the Business Office.
International Students are subject to different regulations. For specific details we must again refer you to the IRS or your tax advisor. The Controller of the College does send a statement to the IRS regarding the amount of aid International Students have received from the College.