My son worked as a R.A. at college where he is a full-time student. He received a 1098T for the cost of his room and board, does he claim this on his income taxes? 525

Forum|Forum|6 years ago
June 6, 2019
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I know room and board isn't usually exempt but as a Resident Assistant, he is required to live on campus so wouldn't this make it exempt according to IRS Pub. 525?

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number1-daughter

How do you report this? My daughter is also an RA and was given a w-2 by her college. They deducted Federal and State taxes from her room and board, so she is actually paying to work at the college.

DavidD66

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DavidD66

Yes, Campus resident advisers (RAs) generally do not have to pay income tax on these benefits. Housing is excluded when residing in the dorm is a condition of being an R.A., and meals are excluded when furnished by the college for the convenience of the college.

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donna136

I have seen conflicting answers for this same question. Some say it is taxable income on the students return and others feel it is not taxable. If it is not taxable, should I amend the amount on the 1098t for scholarships? (It includes the cost of room and board and my daughter is an RA)

donna136

I’m curious how you handled this situation. My daughter also received a 1098T and the value of the free room and board, which is provided in exchange for RA duties, was included in box 5 with her other scholarships. It makes it look as if her qualified tuition expenses were less than her scholarships. In 2016 I deducted the room and board from this scholarship amount. Just today I received a tax bill from NY stating that I entered an incorrect amount for box 5, and she wasn’t eligible now for the tax credit for her tuition expenses. I haven’t found a definitive answer anywhere on how to handle the value of the room and board in regards to resident assistants. I believe it is a condition of employment and should not be reported as a scholarship. But now I’m being audited over this! Ugh!

Carl11_2

Employee

It would have been "More" correct for the college to have issued a W-2 for the value of the R&B, because it is "in fact" earned income. If it's included in box 5 of the 1098-T, then you can treat it like any other scholarship and you'll be fine. Just understand that if the total of all scholarships/grants received exceed the total of qualified education expenses (tuition, books, and lab fees) then the student will report the 1098-T and other education stuff on the student's tax return, and the student will pay taxes on the excess - not the parent.

The room and board is not a qualified education expense. But by including the value of the R&B in box 5, the collage is allowing you to apply the cost of that R&B to those *qualified* education expenses, with any excess being taxable income to the student.

Fafsasucks

Exact same for me right down to the year. I got a running bill/credit printout from Clarkson and have spent hours breaking it down by school year and then by tax year, because they aren't the same thing. Internship and RA position has made this so much more complicated than it needs to be. I'll forward my notes to the auditor tomorrow and hope that when he looks at the big picture he'll dismiss it.

Anonymous

I am curious....What was the outcome with your auditor discussion? Did they agree that room and board for an RA is not taxable? Thanks.

Fafsasucks

The auditor told me you send in the intemized statement and a statement of my own. A couple months later I received a bill with interest from the state with a letter that says 1) I didn't make my case and 2) I didn't send an itemized statement from the bursor. Which I did. So we paid them and on the invoice I write in sharpie: YOU ARE THIEVES. AS SOON AS I RETIRE WE'RE LEAVING THE STATE AND TAKING TWO NYS PENSIONS WITH US.

Anonymous

I have read all I can on this topic and I am still confused by the varying responses.

IRS Publication 525 says: "You don't include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met:
1. The meals are: a) Furnished on the business premises of your employer, and b) Furnished for the convenience of your employer.
2. The lodging is a) Furnished on the business premises of your employer, b) Furnished for the convenience of your employer, and c) A condition of your employment. (You must accept it in order to be able to properly perform your duties.)"

Given this, if an RA is required to live on campus and the benefits are provided as noted above, why would this benefit be taxable?

Hal_Al

Employee

The person is more student than "employee". Publication 970 governs, not 525.

The fact that it's reported on form 1098-T indicates that the school considers it scholarship, not non taxable fringe benefit.

Anonymous

Thank you for the response!

After reviewing everything I can get my hands on, I am still falling on the other side of this question - believing that the room and board benefit is NOT taxable because of the qualifications met under IRS Pub 525.

I understand the point you are making between the two sets of rules; but it seems the only distinction in your analysis is who the employer is. In other words, if my son was still a student, but he was an employee of a non-university business, and received room and board benefits, and he met all the conditions in IRS Pub 525, the benefit would not be taxable. The only difference between the two circumstances is that the University is the employer in one example and a non-university entity is the employer in the other.

Whether the employer is the University or someone else does not appear to be a test for whether the benefit is taxable. Nor does there appear to be a "more" student vs. "more" employee test. He is employed as an RA and he meets the qualifications under IRS Pub 525 - which explain how room and board are taxable as an employment benefit. Under this circumstance, it appears that it should not be taxable.

I do agree that if the room and board benefits were NOT a condition of employment or if they did not meet the IRS Pub 525 requirements, it would be taxable.

Of course, I could be completely wrong about this and will have to talk to the IRS about it. 🙂

Regardless, thank you again for the response.