Work-study programs are a great way to earn money while attending college. The programs are administered by a college's financial aid department and are usually awarded based on financial need. Even though work-study jobs are considered to be part of your financial aid, you still must report the income on your tax return. But if your income is low enough, you may not need to file a return at all.
The Federal Work-Study Program is the biggest source of work-study jobs, with more than $1 billion in funding each year. If you get income from this program, the entire amount is always considered taxable income. Most of the time you will get a W-2 statement from your employer stating your total wages. But even if you don't get a statement, the income is still taxable.
Many scholarships and fellowships contain a requirement that you work as a teaching assistant or perform other duties. In these cases, the part of the scholarship or fellowship that represents payment for your services is taxable. You will need to refer to the wording of the scholarship or fellowship agreement to determine this amount.
Tuition Deductions and Credits
Even though your work-study income is considered taxable, you may be able to avoid paying taxes by claiming tuition deductions or education credits. This applies only to money used for tuition, fees and other items required for enrollment and does not apply to general living expenses.
Who Must File
You may not need to file a tax return at all if your income is low enough. Generally, you don't have to file if you make less than $9,750 (as of 2012) or if you and your spouse make less than $19,500. If you can be claimed as a dependent, you (and your spouse) would need to earn at least $5,950 in earned income, or $950 in unearned income such as interest from a bank account to be required to file. Even if you don't have to file, you may want to submit a return to recover any withholding from your paychecks or to claim tax credits such as the earned income credit or education credits.
- IRS: Taxable Income for Students
- West Texas A&M University: Federal Work-Study
- IRS: Do I Have to File a Tax Return?
- IRS: 1040 Instructions
- Federal Student Aid. "How Aid Is Calculated." Accessed Nov. 1, 2020.
- Federal Student AId. "Who Gets Aid." Accessed Nov. 1, 2020.
- HomeRoom - The Official Blog of the U.S. Department of Education. "8 Things You Should Know About Federal Work-Study." Accessed Nov. 1, 2020.
- U.S. Department of Labor. "State Minimum Wage Laws." Accessed Nov. 1, 2020.
- U.S. Department of Labor. "Wages." Accessed Nov. 1, 2020.
- IFAP.ED.gov. "The Federal Work-Study Program," Page 6-41. Accessed Nov. 1, 2020.
- Federal Student Aid. "Work-Study Jobs." Accessed Nov. 1, 2020.
- Federal Student Aid. "Federal Versus Private Loans." Accessed Oct. 7, 2020.
Alan Sembera began writing for local newspapers in Texas and Louisiana. His professional career includes stints as a computer tech, information editor and income tax preparer. Sembera now writes full time about business and technology. He holds a Bachelor of Arts in journalism from Texas A&M University.