financial aid refund check

Forum|Forum|2 years ago
October 25, 2023
1 reply
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My daughter will graduate from college in December. This year, for the first time, she received a financial aid refund check. She used a portion of it to pay her rent for her apartment, but there is still money left over. I know that this can be considered as income. She also earns income from a part time job. I have always claimed her as a dependent in the past. My question is, should I claim her as a dependent this year? I’m not sure how this refund check will impact my taxes or hers, depending on who claims it. Thank you.

Ask the Experts - Extension - Sept 2023

Best answer by CatherineR

It will depend on whether the financial aid check is considered qualified or non qualified to be considered income. If this financial aid was from the CARES ACT then this applies from the Tax Book:

"Emergency financial aid grants under the CARES Act. Emergency financial aid grants under the CARES Act for unexpected expenses, unmet financial need, or expenses related to the disruption of campus operations on account of the COVID-19 pandemic, are not includible in gross income. Because the grant is not
includible in gross income, no deduction or credit for expenses paid with the grant, including the American Opportunity Credit or the Lifetime Learning Credit, is allowed."

To claim your daughter as a dependent again for 2023 she would have to be at least a half time student for the year; you need to provide at least 50% of her support; and a few more items that can be found at this resource:

Claiming a dependent rules

CatherineR

Answer

Employee Tax Expert

It will depend on whether the financial aid check is considered qualified or non qualified to be considered income. If this financial aid was from the CARES ACT then this applies from the Tax Book:

Claiming a dependent rules

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