529 Account distributions and completing tax forms

MomCat2
Tue, 15 Mar 2011 00:27:42 +0000

I apologize for sounding too harsh, notrichenough. It seems like scholarships should be classified as unearned income, since they’re different from the other forms of earned income which are, as the IRS puts it “amounts received as pay for work you actually perform”. But they’re not classified that way, which is actually a very good thing for students because it means that a lot of them don’t have to file a return.

And we’re all so busy that it’s sometimes hard to take the time to double-check and find a link to back up what we’re posting. But I think that doing so adds an extra dose of “helpfulness” for those who come here asking questions, particularly the often-complex questions about financial aid and tax issues.