GA Zell Miller Scholarship and AOTC

Forum|Forum|3 years ago
February 5, 2023
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I am trying to figure out if we can use the IRS QTRE "loophole" to claim a higher AOTC credit. I'm aware of the IRS publication that gives guidelines for "re-allocating" tuition scholarships and grants to non-qualified expenses like room and board. Essentially, students can add the grant or scholarship to the student's taxable income and thus enable the parents to claim the AOTC, even if the school actually applied the scholarship to payment of tuition and fees. https://www.irs.gov/pub/irs-utl/Pell%20AOTC%204%20pager.pdf

However, I am wondering if this policy can apply to the Georgia Zell Miller Scholarship, which is a tuition-only scholarship. Can Zell Miller be treated as paying for living expenses rather than tuition or is it required to be claimed as tuition-only? I suspect the latter, since Zell Miller states that it covers tuition, but just checking to be sure.

KrisD15

No, not if the scholarship is restricted to tuition expense.

That would be a question you would need to ask the scholarship administrator.

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Hal_Al

Employee

I'm not familiar with Georgia Zell Miller Scholarship, particularly. You may want to do some more research.

That said, the answer to your question appears to be in the question itself.

"However, I am wondering if this policy can apply to the Georgia Zell Miller Scholarship, which is a tuition-only scholarship." I find this wording, at the Zell website, "Scholarship award amount to be applied toward standard undergraduate tuition, up to a maximum of 15 hours, for the specific number of hours enrolled, whether full time or part time." https://www.gafutures.org/hope-state-aid-programs/hope-zell-miller-scholarships/zell-miller-scholarship/award-amounts/

The rule is: you may not re-allocate the scholarship money, if the conditions of the grant are that it be used for qualified expenses (tuition). If the school’s billing statement show’s the Zell payment being directly applied to tuition, that would be a strong indicator.