Reduced Room and Board for Student Employees
USSS-09
About This Policy
- Effective Date:
- 08-01-2008
See current policy
- Responsible University Office:
- Student Services and Systems
- Responsible University Administrator:
- Executive Vice President for University Academic Affairs
- Policy Contact:
- Jenny Stephens
University Director of Financial Aid
stephejl@indiana.edu
- Policy Feedback:
- If you have comments or questions about this policy, let us know with the policy feedback form.
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Scope
This policy applies to campus housing and residence life offices, the financial aid office and employees and describes the proper way to record the value of room and board for Indiana University employees eligible for reduced or free room and board.
Policy Statement
The value of room and board provided for Indiana University employees eligible for reduced or free room and board is excluded from taxable income when procedures below are followed. The value is not considered as estimated financial assistance in determining eligibility for federal student aid, but it must be counted as untaxed income in the year received when the student reports income for that year on the Free Application for Federal Student Aid (FAFSA).
Reason for Policy
Resident assistants and other eligible student employees may receive living allowances in the form of reduced room and board as employee benefits. All campuses with housing and resident assistants should be treating these employee benefits in a consistent manner that ensures compliance with tax and federal student financial assistance rules.
Procedures
Tax Reporting
Per Internal Revenue Code Section 119, reduced room and board for employees may be considered excludible from income in situations where the benefit is provided as a convenience to the employer and when it is provided on the employer's premises. In addition, acceptance of the employer provided lodging must be required as a condition of employment.
Reporting to Employees
Housing contracts signed by employees who are eligible for room/board reductions shall contain specific wording regarding the value of the room and board, the amount of the applicable reduction, and the reason the student qualifies for this “living allowance” as a part of his/her contract.
The housing/residence life office will send annual statements to students on contract, for the student’s purposes. The statement will show the value of the “living allowance” and confirm it to be excludable from income according to a cited Internal Revenue Code Section. Finally, housing/residence life will advise the student that both taxed and untaxed income must be reported on the Free Application for Federal Student Aid (FAFSA) for the subsequent application year, should the student apply for Federal aid.
FAFSA Reporting by the Student
Relevant Federal Student Aid Handbook citations:
Non-need-based earnings are not to be considered as a resource for the current award year because they will be reported as income on the Free Application for Federal Student Aid (FAFSA) for the subsequent award year and will be used in calculating the future EFC. Federal Student Aid Handbook, Vol.3 Ch.7
Housing, food, and other living allowances: Some people, particularly clergy and military personnel, receive these allowances as compensation for their jobs. Money received to pay for rent should also be reported, as should the free use of a house or apartment (the rent or market value of a comparable house or apartment can be used). Similarly, if the student received free room or board for a job that was not awarded as student financial aid (including resident advisor positions that provide free room and board as part of the student’s non-need-based employment compensation), she must report the value of the room and board as untaxed income. (Federal Student Aid Handbook, Application and Verification Guide)