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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29800
Experience:  Taxes, Immigration, Labor Relations
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I am on SSDI disability and am 60 years old, so I am limited

Customer Question

I am on SSDI disability and am 60 years old, so I am limited to making $1090.00/mth. This last school year I worked for Americorp as a tutor and my income was within the necessary limits. My question regards ***** ***** tuition stipend of $5700.00 which I am now entitled to. I want to use this for my son who is currently in college. Finally my question: Will this count as income for me? If yes it puts me over my limits for SSDI. Thanks, Phil
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

The IRS issued a letter

https://www.irs.gov/pub/irs-utl/oc_aug_volunteers_pay_taxes_072911_02.pdf

Are you a volunteer? If so, you should be aware that income or reimbursements you receive for volunteering — such as stipends, education awards, bonuses and allowances — may be considered taxable income. However, a portion of these may also be tax-exempt. Generally, you’ll receive a Form W-2, Wage and Tax Statement, or Form 1099-MISC, Miscellaneous Income, if the compensation you receive is taxable.

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As a result - payments that are NOT reimbursements for expenses you paid for a non-profit activity should be treated as EARNED income and will affect your social security benefits.

Expert:  Lev replied 1 year ago.

That is YOUR income - no doubts about that - and must be included into your tax return.

But the question is whether that is classified as EARNED income - wages or self-employment income that affects your social security benefits.

That might raise the question whether you are a Volunteer or an employee?
The issue addressed by the US Department of Labor and could create some issues for the non-profit ministry as well.

http://webapps.dol.gov/elaws/whd/flsa/docs/volunteers.asp

According to the DOL - when a volunteer is paid over $500 a year OR 20% of what an employee would otherwise be paid for the same service - they must be treated as paid staff and are subject to the labor laws.

Let me know if that answered your question?