Filing United States Federal Tax Returns
Generally, you must file a Federal income tax return if you receive a specified minimum amount of gross income for the calendar year. The minimum amount varies based on a number of factors, including your marital status and your status as a dependent. Refer to IRS Publication 17 for the full explanation of who must file. The tax filing deadline for 2016 is April 18, 2017.
Education Credits and Deductions
American Opportunity Tax Credit: may be claimed for students who are enrolled at least half-time at an eligible institution for at least one academic period during the tax year, are in the first four years of post-secondary education. The credit may total up to $2,500. It may be refundable depending on the tax filer’s total tax obligation, and may be claimed for tuition and fee expenses, as well as books, supplies, equipment and course materials. Full details on the American Opportunity Tax Credit can be found on the IRS website.
Lifetime Learning Credit: may be claimed for expenses for a course of instruction which is part of a degree program or is taken to acquire or improve job skills. The credit may total up to $2,000. Educational tax credits are claimed on IRS Form 8863. Full details on the Lifetime Learning Credit can be found on the IRS website.
Student Loan Interest Deduction: individuals paying interest on qualified education loans (including federal and certain private loans) may be able to deduct up to $2,500 of interest payments made in 2016, even those who do not itemize deductions. Qualified education loans are loans incurred on behalf of the taxpayer, the taxpayer’s spouse or a dependent to pay qualified higher education expenses, including tuition, fees, room and board, books, supplies, and equipment. Additional information on the Student Loan Interest Deduction can be found on the IRS website.
Tuition and Fees Deduction: allows for a reduction of taxable income by up to $4,000 for payments of qualifying tuition and related expenses. This deduction may also be claimed by those who do not itemize deductions. Additional information on the Tuition and Fees Deduction can be found on the IRS website.
Scholarships and Stipends
The U.S. tax laws divide scholarships (including fellowships, stipends, and grants) to degree candidates into two parts. The amount received as a scholarship or fellowship which is used, under the terms of the grant, to pay for tuition and fees required for enrollment, or for fees, books, supplies, and equipment required for your courses, is not taxable. Any additional amount of the scholarship, such as a stipend for room and board or for travel expenses, will be taxable income. If any portion of your funding represents payment for teaching, research, or other services, that portion will be taxable.
IRS Publication 970, “Tax Benefits for your Education,” explains how these items should be reported on your tax form. You should retain any receipts necessary to support your reporting position, although the receipts are not filed with your return. You may or may not receive a tax form from the University (such as a W-2, 1042-S or 1099-MISC) for your taxable scholarship or stipend income. It is still your responsibility to include this income when filing your tax return.
Federal Work Study Program
Federal work-study earnings are subject to taxes. Harvard will send a W-2 for all Federal Work Study Program jobs (on and off-campus jobs).