In early or mid-September, Minerva released a scholarship tax and insurance bill due November 1 on Prepare – an Internal Minerva page where students pay term bills, apply for visas, and more. Minerva did not notify students of the new bill. Hence, many learned of it through a Facebook post by a student from the class of 2020 on September 16, 2019
The bill will likely include some or all of these items: a penalty fee from Berlinovo (the residence in Berlin), the non-qualified scholarship tax, and the GeoBlue (or PGH for those in San Francisco) health insurance fee. The annual insurance fee increased 30 percent from $573.20 for the 2018-19 school year to $745.20 for this year and was presented as a single bill, rather than two for each semester as it had been in the past. This difference, though, changed September 30th and students should see only half of that amount on their term bill. Melissa Morgensten – Head of Student Accounts – advised any students with the full $745.20 to reach out to her as soon as possible.
The Quest contacted the Associated Students of Minerva (ASM) and Morgensten and awaits further clarifications from Minerva. The ASM recently posted on Facebook reminding students of the deadlines and updates on their communication progress with Minerva.
Below is a refresher of the scholarship tax and its implications for students.
What is the scholarship tax?
According to the IRS, a scholarship is tax-free only on the coverage of education expenses. The amount cannot be exchanged for teaching or researching services and does not include room and board, which are all non-qualified scholarship and taxable at 14 percent of the total amount. The Hub website for Minerva students further simplifies these terms; other than tuition, all scholarships awarded for housing and student services are taxable. The Hub provides the below example of how to calculate your tax:
Student A’s non-qualified scholarship is:
$7000 (scholarship) – $5000 (tuition) = $2000,
and 14% of $2000 is $280.
Thus, student A’s tax withholding bill for Fall will be $280.
The tax is billed to Minerva because Minerva is responsible for collecting and submitting the total amount to the IRS.
The history of the non-qualified scholarship tax at Minerva
Emma Noizumi, the former Student Account Manager, first communicated with students about the tax in Fall 2017. Her email stated the 2016 scholarship tax had been paid and absorbed by Minerva in 2016. It went on to inform students that starting from the Spring 2017 semester, students would be responsible for paying the tax. However, Minerva communicated this one semester later, in October 2017. It was at this time students became aware of a new bill due November 1 for both the Spring and Fall 2017 semesters. For many students, the sudden tax caused financial strain given a lack of preparation. The ASM promptly contacted Minerva staff, who decided to split the tax amount into Fall 2017 and Spring 2018 term bills. Shortly after, Noizumi announced via email that future term bills would include non-qualified scholarship tax, along with the scholarship, student fees, tuition, and tax withholding.
Students must react by rearranging expenses to accommodate these costs or notify parents/guardians/sponsors. The due dates are September 30, November 1, and November 30 for the insurance waiver, the non-qualified scholarship tax, and the Spring 2018 term bill respectively.
The Quest is in contact with both the bursar office and the ASM and will publish new information as it becomes available.