<p>I understand that all aid that is not tuition, books and required expenses must be declared as income on the child’s tax return. My child is a freshman so any aid above the allowed amount will be included as income for the 2009 tax return. </p>
<p>My question is should the Spring 2010 semester aid be declared along with the first semester aid in the 2009 return since it has been credited to the student’s account in December 2009 or should it be included in the 2010 income tax return since it is aid for the Spring 2010 semester. Or maybe it doesn’t make a difference?? Payment for the spring semester is not due until January. Would it make any difference in when the tax is included in income depending on whether we paid the bill in December or January? To clarify if we paid in December would we have to report in 2009 or could we report in 2010?</p>
<p>I believe it should be filed in conjunction with the 1099’s you’ll receive. Check IRS Publication 970 (2009 isn’t out yet last I checked) and with your accountant to be sure.</p>
<p>My recollection is that the instructions say that aid awarded in the first three months of the calendar year may be counted in the previous year. So if an aid award for 2009-10 academic year is disbursed at the beginning of fall term, and then again for winter or spring term in early 2010, that you can count the whole thing as 2009. But I don’t think you’re required to do it that way.</p>
<p>We chose to go by the 1098T sent by the school each year; it is simpler to keep track by going with the school form each time unless there will be other issues to the tax consequences.</p>
<p>Thank you all for posting. I wasn’t aware that the school would be sending out a 1098T. I agree with somemom that it will be simpler to keep track by going with the school form.</p>