(UPDATE: The giveaway is now closed. We have a winner! See the comments for more info.)
It’s Back To School Week on the blog!
In 1944, President Roosevelt signed into law the Servicemen’s Readjustment Act of 1944. Today, we know the law by its more common name, the G.I. Bill.
There are a host of benefits available to servicemen and women under the law but the one that tends to receive the most attention is assistance to attend college, high school, or vocational education. Under the G.I. Bill, tuition assistance is available, as well as stipends for books. There’s a cap for the cost of educational benefits at a private college (as well as foreign colleges) but generally, the bill covers the full cost of tuition at a public college in the state of residency. Assistance is also provided for vocational and technical schools as well as other training and licensing programs.
Generally, payments are issued monthly but for the Post-9/11 GI Bill (sometimes called the G.I. Bill 2.0), tuition & fees are paid directly to the school. Book stipends are paid at the beginning of the term and housing allowances are paid at the end of each month. You can find out more about educational benefits through the Department of Veterans Affairs here.
For federal income tax purposes, payments you receive for education, training, or subsistence under any law administered by the Department of Veterans Affairs (VA) are tax-free. Those payments should not be reported as income on your federal income tax return.
But be careful: if you qualify for other tax-favored benefits, like education credits, you may have to reduce the amount of education expenses qualifying for those benefits by part or all of your VA payments. However, this only applies to the part of your VA payments attributable to education expenses.
Here’s a quick example. Under the G.I. Bill, let’s say that you receive a monthly basic housing allowance worth $1,500 and $5,000 in tuition assistance payable directly to the college. Under the law, both of these benefits are tax-free.
You believe that you are also entitled to claim the American Opportunity Credit. Let’s say that your education expenses totaled $7,500. For purposes of calculating the credit, you have to deduct the portion paid in tuition assistance ($5,000) from the total of your expenses. For the purpose of calculating the credit, you claim $2,500 in expenses ($7,500 less $5,000). You do not deduct any of the housing assistance because it was not for education.
Education credits may be refundable – and you can use those funds to stock up on school supplies, including backpacks.
And that brings us to our giveaway!
Kmart is offering one lucky reader a fun Pink Cheetah Backpack from AKA. The cute colorful backpack is perfect for girls looking to go back-to-school in style. Retail value $24.99. For all your back-to-school needs check out Kmart.com.
To enter to win, just post a comment below telling me your favorite thing to put in a bookbag. It doesn’t have to be books. I’ll go first to get you started: Cell phone!
Entries must be posted in the comments section for this blog post in the space below by 5:00 p.m. EST on September 9, 2013. It’s just that easy. I’ll choose the winner randomly (using a number generator) out of all of the qualifying entries.
Be sure and read the fine print for more rules because, as you know, I’m a lawyer and I like rules:
- Don’t panic if your comment doesn’t show immediately. If it goes to moderation because, for example, you’re new here, the time stamp on your comment is what counts.
- I love my Twitter followers and my Facebook fans but for this particular giveaway, tweets and Facebook comments will not be counted. Ditto for emails. You must leave your comment on the blog at this post.
- You can enter as many times as you like but you must leave a different answer each time you comment.
- Offensive comments or comments that otherwise violate the comment policy will be deleted and will not be considered valid for purposes of the contest. Similarly, pingbacks and other links will be disregarded for purposes of the contest.
- You must include your full name and your email address with your entry, just enter it when you register to comment. I won’t publish your email address but I do need contact information for the winning entry.
- Due to shipping considerations, only United States addresses, please. Sorry, Canada, eh?
- I respect your privacy and I will not send you anything unrelated to your entry in this contest. By entering the contest, you agree that I may post any part or all of your submission including your name as a part of the contest announcements or promotions, with the exception of your email address.
- Like Judge Judy, my determination is final.
- Prizes are provided directly by our sponsors. Sponsors do not pay for placement and do not receive any compensation for contributions – neither do I have any affiliation, paid or otherwise, with any of our sponsors.
Comment away! And thanks for participating in Back To School Week!
