What’s new with 2021 taxes, scholarships, & pandemic assistance
As Dollars for Scholars supports more and more students of all ages and walks of life, you may encounter more recipients or families asking about the taxability of scholarships. We have resources and can point them to assistance so you don’t have to.
Do students file tax returns?
If a student’s taxable income exceeds $12,550 for 2021, they are required to file a tax return – even if their parents still claim them as a dependent. If students’ taxable income is less than that threshold, it can still be a good idea to file – they may be eligible for a refund of taxes withheld by their employer, or may qualify for the Earned Income Tax Credit.
Are scholarships considered taxable income?
It depends on how the scholarship or grant is applied. If funds are used to pay for tuition, fees, books, supplies or required equipment, it is not taxed. However, if students use scholarship funds for meals, housing, transportation, childcare, technology, or health care costs, those are typically considered taxable income. See our blog for more details on how scholarships and emergency aid, and loan forgiveness are treated during the pandemic.
Where can students find help with their tax situation?
Colleges will provide students an IRS Form 1098-T summarizing all of the reported financial aid received to their campus; students and families should review this information with a tax preparer. In addition, the IRS has a number of resources available to offer free tax help for taxpayers who qualify, including Volunteer Income Tax Assistance (VITA).
ChapterNet Update: Answers to Common Scholarship Stress Points
Students Not Matching or Moving Forward?
Be sure to compare your Scholarships’ Standard Restrictions and your students’ profiles. If students miss or provide inaccurate information on their profile, they will not match. If they have not clicked on the Search Scholarships button, or have not done so after making any updates to the application, their application will not advance.
For example, if your scholarship requires students to indicate they will be attending “Full Time”, students must have “Full Time” as their answer to “Student will be enrolled.” Anything else will leave them ineligible.
Solution: Communicate to students what must be included in their profile to be eligible, and remind them to Search for Scholarships on My Dashboard to advance their application forward. (See Page 24 of this PDF for Instructions)
Incomplete Applications?
The most common parts of the profile left blank are the Reference and Transcript Sections, followed closely by the Goals and Unusual Circumstances essays. This can lead to frustration for both you and students, and creates extra work for everyone after scholarships close.
Solution: Chapter Super Administrators can run one or more stock reports in the Applicant Reports section including “Applicant Status: Incomplete Primary Reference Request-2022” and “Applicant Status: Incomplete Transcript Request-2022.”
These reports will generate a list of students who haven’t completed these sections, and you can email those students right from the report feature to help them meet your deadline.
Scholarship Deadline Disaster?
We recommend that scholarships do not close on Friday, Saturday, or Sunday nights. Our technical support team is only available from 8:00 am to 5:00 pm central time, Monday through Friday.
Solution: Whenever possible, have your scholarships close on Monday, Tuesday, Wednesday, or Thursday nights.
Evaluation Overload?
Once scholarships have closed, the real work begins. It’s time to evaluate applications based on your chapter’s various award criteria. We know many of you have lots of different scholarships to offer, and it can seem overwhelming to determine the most efficient ways to read through hundreds of essays and dozens—if not scores—of recommendations.
Solution: Dollars for Scholars, especially those with more than a dozen unique applicants, should conduct as much of their evaluation inside of ChapterNet as possible. Use “ChapterNet Guide: Scoring and Evaluation,” and access the training videos in Affiliate Resources. Use the grey support tab at your ChapterNet Admin portal to request assistance.
Reminders
- Ongoing – Keep your board roster up-to-date
- ASAP – Make sure your Dollars for Scholars’ bonding insurance is up-to-date
- March 11 – Deadline for students to apply for the Wells Fargo Veterans Scholarship Program—tell your community about this scholarship opportunity
- March 24 – Dollars for Scholars Connect at 6:30pm CT (click here to register today)
- March 31 – Financial Reports and Affiliate annual fee are due
