CADET FINANCIAL INFORMATION
SCHOLARSHIP SUBMISSION INFORMATION
Scholarship and/or Educational Investment Funds accepted mid – August for Appointees.
Agencies should issue scholarship proceeds directly to the Cadet. When a scholarship agency is unable to make payment directly to the cadet, the scholarship may be accepted for credit to the Cadet’s pay account provided there are no restrictions on the scholarship and the check is payable to the US Treasury. Restrictions are any condition or limitation an agency places on the use of their scholarship funds. Restrictions examples: “must be used for tuition, room and/or board,” “student is required to maintain a specific GPA,” “scholarship funds will be paid back if Cadet Candidate disenrolls,” etc. Scholarships silent on restrictions will be treated as non-restrictive and accepted. Once a scholarship is accepted is it never refunded to the agency granting the scholarship, even if the cadet or cadet candidate disenrolls. Be sure to memo the cadet’s full name and social security number on the check.
Educational 529s/EE Bonds
CHECK WITH YOUR STATE FIRST FOR THE 529s as each state is different. Cadet Pay can’t accept checks or bonds direct from investment business. Cadets/parents must cash the checks /bonds first and then write a personal check using the instructions as listed above under Scholarships. This can be used for student costs at the Academy such as books and laptops.
Please make checks payable to: “US TREASURY”
2304 Cadet Drive, Suite 2200
United States Air Force Academy, CO 80840-5035
CADET & CADET CANDIDATE TAX INFORMATION
Most cadets don’t have many deductions and file an EZ form. The Academy has volunteers that are available on an appointment-only basis to help cadets with their taxes (free of charge) to ensure they have used all the deductions they are entitled to. Income Tax assistance is available through USAFA/JA (located in Harmon Hall, (719) 333-3940). If your cadet (C4Cs) needs proof of attendance for you to claim him or her for part of the year, have your cadet visit the Academy Registrar and request a letter. The letter will be available for pick up from the Registrar’s Office in Fairchild Hall.
Federal Income Tax
This information is based on the tax law and current rulings of treasury officials. Please note that it is informative only and should not be considered as a reflection of the official position of the Internal Revenue Service (IRS).
Federal and State tax withholding will be started at the filing status of single with one exemption. The state of legal residence will be automatically input based on the home of record on file for the student. Cadets may change their state for tax withholding at any time by completing a State of Legal Residence Declaration in the Cadet Pay office, located in Vandenberg Hall, room 3C24. All cadets at the Academy are required to file their own income tax returns. As a fourth-class cadet entering the Academy in June 2016, you will earn during 2016 approximately $6,272, which you must report as income from the Air Force.
Once you become a cadet at the Academy, you are considered a member of the active military, and are no longer dependent upon your parents for support. You are considered supported by the Air Force or by yourself. (See IRS Publication 17). However, since as an entering fourth-class cadet you were probably a dependent of your parents for half of the year before you entered the Academy, you may possibly be claimed as a dependent on their return for that year. In order to claim you as an income tax exemption, your parents must have contributed more than half of your total support for the year. “More than half of support” refers to dollar value, and not to the length of time support was given. Following the steps below will help determine whether the “more than half of support” test is met. NOTE: Effective 1 January 1987, if you can be claimed as a dependent on the tax return of another taxpayer, then you may not claim yourself as a personal exemption on your tax return. Thus, if you are claimed on your parents’ return, you may not claim yourself as an exemption when you file your own return for that year. After the fourth-class year when your parents may no longer claim you as a dependent on their return, you may claim yourself as an exemption when you file your own tax return.
Compute the value of support contributed by your parent or guardian in 2016. Compute the value of support contributed by you and your parents or guardians and others (include support provided by the USAF).
Compare your parents’ or guardians’ share of the total with that provided by you, the Air Force, or others. If your parents’ or guardians’ share is more than 50 percent of your total support, they meet the support test and can take the dependency exemption. In determining how much your parents or guardians contributed to your support, a parent or guardian may include the cost of clothing, medical and dental care, education, medical insurance premiums, transportation, entertainment, Christmas presents, etc., for you. If you lived at home during the first six months of 2016, a proportionate amount of the family food bill and utilities, fair rental value of lodging furnished, etc., may also be included. Educational expenses might include cost of tuition, books, board, and lodging, school supplies, and transportation to and from school if you attended college, preparatory school, or high school prior to entering the Academy.
In computing the value of support furnished you from sources other than a parent or guardian, both taxed and untaxed amounts must be included. Your taxable pay must, of course, be included. In addition, the fair value of the food, lodging, medical care, education, and other services furnished you by the Air Force must also be included even though their value is not taxed as income to you.
The Internal Revenue Service has ruled that an appointment to the Air Force Academy is not a scholarship. Thus, the cadet must include value of the education as support from sources other than the parents or guardians.
The amount of support contributed by the cadet for one semester of education, food, lodging, cadet pay, etc., is $32,385. Compare this figure to the amount of support provided by the parents. If the parents’ figure is higher, then the parents can claim the cadet as a dependent on their income tax return and the cadet cannot claim a personal exemption. If the $32,385 figure is larger than the amount provided by the parents, then the cadet will claim a personal exemption on his or her income tax return, and the parents cannot claim the cadet as a dependent on their income tax return.
Social Security Benefits
Academy cadets are excluded from receiving Social Security benefits. Current Social Security regulations state, “Cadets and Midshipmen of the service academies are in the same situation as military personnel attending schools operated by the Armed Forces such as officer candidate schools, electronic schools, etc. They are considered to be on active duty in the armed forces while they are attending the academies and are, therefore, employees of the United States. They are entitled to basic pay at a monthly rate specified by law and are required to complete the courses of instruction at the Academies.” If a cadet is a recipient of Social Security Benefits, the cadet must notify your local Social Security Office that they have accepted appointment to the USAFA and will be entering.
Serviceman’s Group Life Insurance (SGLI)
Cadets are automatically enrolled in SGLI for $400,000. If your cadet wishes to lower his or her coverage, they need to stop by Cadet Personnel in Vandenberg Hall, Suite 3C24 (above the “C” store).