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Is a grant taxable
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Taxes
Is a grant taxable
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My wife and I can't afford to increase our earnings. If our income were to increase we would lose several important benifits. The lose of those benifits would be worth 7to 8 thousand a year.&nbs
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Cat:827966ee-6d39-4ef7-98a5-0157a43092f8Forum:a882faf9-edb3-472d-896c-a5e64a486dfc
Cat:827966ee-6d39-4ef7-98a5-0157a43092f8Forum:a882faf9-edb3-472d-896c-a5e64a486dfcDiscussion:f9cd99f5-2bce-4211-8c5e-9f60b4197aff
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Is a grant taxable
posted at March 22, 2012 11:12 PM EDT
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Posts: 17
First: March 21, 2012 Last: June 23, 2012 |
My wife and I can't afford to increase our earnings. If our income were to increase we would lose several important benifits. The lose of those benifits would be worth 7to 8 thousand a year. My wife who is a photographer and has won many awards needs new and better equipment. Her photography is very important for her well being. We are considering applying for an art grant to help her get new equipment but no one seems to know if it is taxable and considered income. Does anyone know or who we should ask? We have called the IRS and SS but they didn't know. Any help we will be thankful, Tim |
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Re: Is a grant taxable
posted at March 23, 2012 2:35 PM EDT
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Posts: 1924
First: November 27, 2011 Last: May 31, 2013 |
In Response to Is a grant taxable: My wife and I can't afford to increase our earnings. If our income were to increase we would lose several important benifits. The lose of those benifits would be worth 7to 8 thousand a year. My wife who is a photographer and has won many awards needs new and better equipment. Her photography is very important for her well being. We are considering applying for an art grant to help her get new equipment but no one seems to know if it is taxable and considered income. Does anyone know or who we should ask? We have called the IRS and SS but they didn't know. Any help we will be thankful, Tim Posted by LoganSmith Who would the grant come from? A Foundation? An Association? A generous benefactor? What benefits would you lose if you increased your earnings? If your earning potential is great enough, it could be worth MORE than the benefits. |
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Re: Is a grant taxable
posted at March 27, 2012 11:45 AM EDT
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Posts: 17
First: March 21, 2012 Last: June 23, 2012 |
Because my income is so low we get help with medications and we don't have to pay for our medicaid. But if my income were to go up a few thousand a year I could lose these benifits and it would cost a bundled like between 7000 to 10000 with the donut hole, extra charge for perscription, and I would have to pay for my medicaid. As for as grant she has some government grants and foundation grants she could apply. And they are about $3000 to $5000. I believe as long as it for equipment and photography it would be tax free but if she pays herself for anything then it would be income. But I can't get any info on whether it is taxable or not. I have been told to contact a tax lawyer but we can't afford to see one. My wife suffers a lot and the photography is therapy for her that she has a knack. She has won numerous awards but is limited by her equipment, like lights, lenses, etc. . . |
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Re: Is a grant taxable
posted at March 27, 2012 2:28 PM EDT
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Posts: 1924
First: November 27, 2011 Last: May 31, 2013 |
You can look up IRS publication 525 (Income) and IRS publication 970(Education) to see if any of their definitions of income apply to the type of "grant" towhich you are referring. Grants from a non-profit foundation for a specific reason or purpose are usually considered gifts. Gifts from anybody (another individual, group, business or for profit corp.) are taxable to the giver, not the receiver. If the money is received as a result of competition, it is not grant but a prize and is taxable. I am unfamiliar with any "government" grant that would go to a sole individual unless it is for education purposes (PELL Grant) So, it really depends on the detailed nature of the money and it's origins and use as to how it is defined within the income realm. If the Medicaid help is what you are worried about and/or if you are receiving SSI benefits, you should ask the question to the appropriate government agency giving them some details of the money scource. They have all the criteria of what sort of money origins they consider in their criteria for eligibility to the program. Medicare: Help with Medical and Drug Costs Understanding Supplemental Security Income: SSI Income Defined You can also check with a local "Enrolled Agent" tax preparer - they are far less expensive than a CPA or Tax Attorney and they know taxes. |
