For the students you supported with scholarships in 2020, it is helpful to know more about scholarship taxability and COVID-19 response initiatives. These are some common questions we’ve been hearing:
Do students file tax returns? If a student’s taxable income exceeds $12,400 for 2020, 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, lodging, 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 are treated during COVID-19.
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; 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).
Join Scholarship America to speak out about the taxability of scholarships. In 2017, students paid in approximately $2.8 billion in tax revenues, including taxes on scholarship awards. Scholarship America, along with the National Scholarship Providers Association, is working to raise awareness in Congress on the taxability of scholarships – the only form of charity that is taxed to the recipient. If you’d like to get involved in this effort, please contact Kalwis Lo, Director, Marketing, Policy & Advocacy.
Dollars for Scholars Connect
Nearly 80 Dollars for Scholars leaders attended our first Dollars for Scholars Connect sessions on February 11. Participants covered a range of topics: impacts of the pandemic, fundraising challenges, successful ways to recruit new and “younger” board members and volunteers, internship programs, grant writing and ways they’ve adapted traditional in-person student guidance.
As Erik Bohlken, President of Independence Area Dollars for Scholars said, "[I] enjoyed hearing the ideas shared. It's good to hear from people who are in the same situation."
Here are a few highlights from the first Dollars for Scholars Connect:
Gene Snook, Secretary for Lincoln Heights Dollars for Scholars, shared a new student-donor initiative where seven of their students recorded a series of videos thanking the donor for their renewable scholarship and shared how they are coping with the pandemic. These videos are being shared on Facebook and in digital communications.
Save the dates for our future Dollars for Scholars Connect meetups on Thursdays--April 1, August 26, and October 7.
We encourage you to share topics and questions with yourEngagement Director for possible inclusion in upcoming sessions. Your ideas are appreciated by your fellow volunteers, like Bruce Brodsky from Utica Dollars for Scholars, “Thank you for hosting this Zoom meeting. This was most helpful and I'm leaving with several very good ideas to share.”
Dollars for Scholars Marketing Hub
In an effort to simplify your digital experience while still bringing you the marketing and fundraising materials you need, we decided to retire the current Dollars for Scholars Marketing Hub. Going forward, we have consolidated all marketing and promotional materials into Affiliate Resources.
An email was sent on February 2 from your Engagement Director (please reach out to them if you have specific questions). The Dollars for Scholars Marketing Hub will no longer be available starting March 1, 2021.
Resources to Review in ChapterNet
August 2020 Enhancement Overview: Get acquainted with the new look and layout of ChapterNet
How to complete the annual financial report training video
How to Update your Board Roster training video
Updated “ChapterNet Guide” on scholarship setup, scoring & evaluation, awarding & disbursing, and reporting
30+ “How To” training videos from scholarship setup to updating your Dollars for Scholars website
Affiliation Fees + Financial Report
If you haven’t already, please make sure to send in your affiliation fees and update your financial report in ChapterNet by March 31, 2021. In addition, recent communication was sent on a new option for you to access your funds faster with ACH Direct Deposit. You can find the ACH Overview and Authorization Form in Affiliate Resources.
