Do I Need to Claim My GI Bill When Filing Taxes?

A group of soldiers is walking on the road.
Image Credit: ChrisSuperseal/iStock/Getty Images

The GI Bill is an education benefit provided by the Department of Veterans Affairs. It is a monetary award granted to qualified veterans who have served in the U.S. military and received an honorable discharge. The money can be used to pay for a college degree, a certificate program, flight training, an apprenticeship or correspondence courses.

Payments and Income

GI Bill payments are made directly to the veteran to be used for education and training expenses in approved programs and institutions. It is the veteran's responsibility to apply the money toward bona fide educational expenses. This may include tuition, fees, books and, in some cases, housing. Payment amounts are calculated based on several factors such as estimated tuition, hours of training, regional cost of living and the veteran's military status and rank.

Excess Benefits

If the approved benefit payment to the veteran is higher than the costs incurred in an education program, the veteran is free to use the remaining money. If the costs of completing the educational program are higher than the benefit amount, the veteran must make up the difference. In either case, the money received can be counted as income for the purpose of acquiring credit, but it is not necessary to claim it as income except on applications for Federal Student Aid.

Filing Taxes

GI Bill payments are not taxable income. Veterans whose only income for a given year was GI Bill payments do not have to file taxes. If the veteran had other income such as wages or investment dividends, a tax return may need to be filed but the cash benefits received through the GI Bill are tax-free and do not need to be claimed.

resources