The money you earn from Federal Work-Study is generally subject to federal and state income tax, but exempt from FICA taxes (provided you are enrolled full time and work less than half-time). Federal Work-Study earnings during the calendar year should be included in the totals for AGI and Worksheet C on the FAFSA.
Your employer will give you a W-2 that will list all the required information.
There are no specific tax credits or deductions to take advantage of for work-study. However, if you’re using work-study to pay for tuition, that tuition is eligible for education credits thay you or your parents may be claiming.
Tax credits can’t be claimed for tuition paid for by tax-free income like grants and scholarships, but tuition paid for by work-study is eligible.
Now the question is if your income meets the threshold for do you have to file? Which will depend on if you can claim yourself or your parents and other considerations.
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