The university in conjunction with our union did the math for how this would affect us. Those of us on fellowship and GSIs/GSRAs (TAs/RAs) would see our take home pay decrease by an average of $9,000 per year. We only take home about 2k/month between September & April (summer varies from no funding all the way up through 2k/month).
That is just awful, Romani. Just awful.
@3scoutsmom You said
I’m most upset with them not doing anything about the kidee tax on undergrad scholarships. I thought the whole idea was to simplify taxes. The whole kidee tax is just crazy complicated! I’m fine with kids paying taxes on their taxable portion of scholarships but not at their parents tax rate! It is not as simple as people here and various web sites make it out to be. If the student can be claimed on the parents taxes there is some formula to figure out the student’s standard deduction, it isn’t a fixed number. If the student also has earned income and unearned income it will effect their standard deduction.
I thought a child’s scholarship was non-taxable. Is this a proposed change in the new Trump law? Or has it always been this way? See how much stuff we learn here!!!
Permanent tax cuts would have a better chance of altering behavior (more dividends, investments, raises, hiring) than temporary ones would.
Some scholarships like those for an REU are taxable, but at the parents rate because of the kiddie tax. The kiddie tax applies on unearned income for full-time students until age 24 REGARDLESS OF WHETHER THEY ARE YOUR LEGAL DEPENDENT!
My D2 is at graduate school. She is completely independent starting in 2017. We pay none of her upkeep. If she were to get an NSF fellowship, under the existing system, that fellowship would not be earned income - she would get a 1099. She is 22 for 2017. She will be 23 for 2018. In both years such income would be considered unearned income and taxed at our tax rate. This is foolish. She understands this and will stay on an RA or a TA where she gets a W-2.
So… maybe I am confusing myself. But if my grad student is 22 or 23 years old, and her PhD program tuition waiver becomes taxable, is it considered unearned income? Is she not only going to be taxed on it, but taxed at MY rate?
@MassDaD68 right now without any changes to current tax laws, any scholarship going to anything other than tuition books and certain required fees are not only taxed to the student but at their parents rate after their taxable scholarship is added to the parents income for the purpose of calculating the tax rate. I wanted them to get rid of this and just tax the kids at their own rate for scholarships that include room and board instead they have gone the other direction and are taxing grad students tuition waivers!
My D is NM merit at OU and has a tuition waiver that is good for 5 years that can be used for grad school I have no idea how the new preposed tax will effect her.
Also… the house vote is tomorrow. If you have an opinion (either way) on this bill, today would be a good day to call.
Looks like the “tax due on options vesting” is now off the table.
And if you brew craft beer, you win! They added an amendment to cut the excise tax in half on small brewers. How did they, of all industries, get a special break? Love to know how that went down.
Didn’t see any news on the taxability of grad student tuition waivers.
@3scoutsmom , from what I can tell, the waivers that will be taxed are those that are associated with work (TA, research). I read the text of the first bill, and it seemed that it was linked to working. I don’t think that other waivers are taxable, but I could be wrong.
How that went down? Over a pint of good ale, I suppose! 
Agree, @notrichenough, I don’t see that the changes in the last 24 hours fix the tuition waiver issue. Still taxed in the house version.
The problem is if the House version passes as is, what will happen in the reconciliation phase?
I don’t know which version this was in, but I read that one of the proposals is to demand that you use FIFO when you sell a taxable mutual fund/stock. Of course this would usually mean more taxes since the first shares bought would’ve had the longest time to increase in value. Just another way to hurt the middle class.
Sorry for the confusion, my bad. @MassDaD68 complained about the kiddie tax applying to scholarships beyond tuition and I was just pointing out that the kiddie tax applies to the unearned income of a 22 or 23 year old who is a full-time student regardless of whether the student is supported by the parent and thus even applies to the living stipend for fellowships.
Under current system:
tuition waivers, scholarships or fellowships is always non-taxable whether from RA, TA or Fellowship.
RA and TA income is W-2 income and thus earned income
Fellowship income beyond tuition is 1099 unearned income and thus subject to the kiddie tax.
The Change Under the House Plan
tuition for RA or TA is part of taxable W-2 earned income.
Actually, such a thing may affect the upper classes more, since most of the middle class gets relatively little of its income from capital sources including capital gains*. It is the upper classes who tend to have large shares of their income from capital sources including capital gains.
*It is likely that, to the extent that middle class people have interests in capital investments, much of it is in retirement accounts (401k, 403b, IRA), or are indirect interests such as defined benefits from pension plans. Such capital investments would not be subject to normal taxes on capital gains, though distributions would be taxed as pension income when received.
I had a wonderful Constitutional Law professor who had a few premises to explain Supreme Court Decisions. One was “The Court loves beer!”. He emphasized (and demonstrated) how much Supreme Court decisions depended on the likes and dislikes of the individual justices, but certain likes and dislikes were virtually universal and crossed party and ideological lines. Beer is one of them. It looks like the legislature feels the same!
Looks like they’ve lost one vote in the Senate and Collins not happy with the insertion of ACA mandate repeal.
I do think from something I saw today that the grad school tuition waivers would also be taxable in most states as well if it is taxable under federal law. That makes it that much worse. 
^ Oh for the love of…
I always wanted the opportunity to pay to be an instructor.