Most students would be happy to receive a scholarship or any other financial aid to support them while studying. If you are a student with U.S. citizenship, you may be eligible for a scholarship that is a component of the tax refund for students with U.S. citizenship. Keep readin the following article to fully understand the subject.
In some cases, U.S. citizenship can be a difficult burden on its citizens – whether it is mandatory reporting to the IRS or at potentially high tax rates. However, U.S. citizenship may in some cases help you gain a bit of financial support from the IRS. The U.S. tax system is based on income, deductions, credits and reimbursements.
All of these are used together to calculate the tax liability and can acquit you desirable refunds. One of the most common reimbursements is a refund given to students with U.S. citizenship while studying. What is a tax refund? What is special about a student tax refund and what are the criteria you are required to meet in order to receive it? All the details in the article here.
Tax reports and refunds
The U.S. Tax Authority, known as the IRS, imposes two main obligations on U.S. citizens (described and detailed in tens of thousands of provisions of the law). Those two obligations include: a tax reporting duty and tax obligation. Both obligations are separate and independent – not everyone who submits a tax report will be required to pay tax.
The reporting obligation is very broad in scope and refers to an American citizen or people holding a green card – wherever they are. This means that the very fact that someone holds a citizenship requires him to submit an income tax report to the tax authorities. That is, even if you are an Israeli citizen who holds dual American citizenship and have never visited the United States – you may be required to submit a tax report to the Tax Authority if you exceed the income thresholds set out in the law. These thresholds vary depending on the status of the presenter, but at all they are very low, and it can be said that the reporting obligation is extremely common.
As part of the annual tax report, that is done using Form 1040, the taxpayer reports his worldwide income (even incomes from minor part time jobs such as your income in Israel from a teaching assistant position.). Moreover, the taxpayer will report deductions and credits due to him, and most importantly – tax returns as well!
There are a large number of possible refunds, but the most common are child reimbursements, student reimbursements and low-income returns. It should be estimated that refunds are given even if the taxpayer did not have to pay tax for that tax year.
Tax refund for students with U.S. citizenship – what is it?
In order to encourage higher education and enable opportunities for American citizens, the U.S. government provides tax benefits to American citizens with Social Security Number numbers, who attend recognized academic institutions. These benefits are paid for the first four years of their studies.
As part of the benefits, students are entitled to a tax credit of up to $2,500 (depending on tuition expenses, these expenses also include expenses on books and equipment), with up to $1,000 in refunds.
The criteria for receiving a student tax refund
As we explained in the previous sections, American citizens usually have to file a tax report and in some cases are entitled to receive tax returns – sometimes even as a monetary refund. One of the most common reimbursements is the student tax refund.
Here are the criteria for receiving a refund:
U.S. citizenship and Social Security number
The first necessary condition is U.S. citizenship and a Social Security number. In the absence of a National Insurance number, you can apply for it to be issued, and after you receive it to apply for a tax refund.
Studies in a recognized academic institution around the world
Not all academic studies will entitle you to a tax refund – studies must be in a recognized academic institution. What is a recognized institution? There is a detailed list of institutions around the world, in Israel the recognized institutions are: The Hebrew University of Jerusalem; Tel Aviv University; University of Haifa; Ben-Gurion University; Bar Ilan University; The Technion in Haifa; The Interdisciplinary Institution in Herzliya.
Duration of studies
Another necessary condition is that this is a degree to which studies take place for less than half the time required to complete a full student year. In other words – not every short course you take at the university will entitle you to a refund. Studies must last at least half a year as a regular student, i.e. a semester.
When was the application submitted
The credit requirement must be submitted before the student has fully completed his four years of school.
Lack of convictions
Another requirement is that the student was not convicted of drug offenses at the end of the tax year for which the acquittal was requested.
If you have met all of the above criteria, you are entitled to a refund.
How is the application submitted?
The credit requirement is made as part of the annual tax report submitted by the student – the student will submit Form 1040 and in the relevant section will fill out all the details relating to the refund.
The refund requirement can be required up to three years after the mandatory submission date of the tax year for which the refund is required, but as you recall, the requirement cannot be submitted if the student has completed four years of study. In addition, it is not possible to claim a refund for additional years of study beyond the additional four years of study. Similarly, it is not possible to claim a refund when the tax report is submitted in the status of “married people serving separately”.
Undecided if you are eligible for a credit? The MesAmerica team will resolve your conundrum and help you file and receive the credit requirement quickly and easily.
