question about a check to help with the tuition from an old boss

[emanon1501]

I live in Illinois, which is a state that has health insurance for entire family with low income. Also, for the last four years, I get social security for the disability. During that time, I have been attending university to obtain a BS degree in Information System, which I graduated on May 2010. Since then, I have been looking for a job, but to no avail. So, I went back to college to earn a graduate degree. In one last desperate attempt, I contacted the company I used to work for in 2007. They said no to job for me, but they were willing to give me 15,000 to help with the tuition with no string attach. I am afraid if I accept that check, I could lose SSDI and/or health insurance via family care. I am more than happy to lose them, but only until I have a job with a steady income.

Is there anything to be alarm about it? What should the old boss write down in the memo section to ensure that there is no string attach. What will happen to the state provided health insurance and/or ssdi?

Thanks for any feedback. I really could use the money to help pay for the tuition, books and etc.

[Joan.of.the.Arch]

Perhaps he needs to pay it directly to your school, designating it a scholarship for you. I don't know for sure. I think your social security office would be the pros to ask this question of.

[krantcents]

Perhaps he needs to pay it directly to your school, designating it a scholarship for you. I don't know for sure. I think your social security office would be the pros to ask this question of.

I was thinking exactly the same thing.

[emanon1501]

I think that is a great idea, but I doubt he would do that. He may just drop a check in the mail, so what should he put down in the memo section that ensures that I do not have to paid him back.

I checked, there is no impact on SSDI, execpt they may count it as one month of work trial peorid.

As for state health insurance, I will have to call them. They never ask for our tax forms, just how much we make each month.

[Joan.of.the.Arch]

I don't think what he writes in the memo section makes one whit of difference, legally. Writing "gift" or "for tuition," or "loan to be repaid after graduation" or something there won't really direct its use by you; The memo won't make it into a certain kind of contract. The memo is for his own bookkeeping notes.

[jpg7n16]

It shouldn't have any impact on your at all, unless there are asset restrictions of some sort.

The check would be a gift so would have no effect on your income. No matter what he writes in the memo (like Joan said)

You're not performing any work, so it's not compensation. It's just a gift. Which the former employer can give $13k/year (as an individual) gift tax free. If they gave directly to the university on your behalf, there is no limit on the amount they can give.

If there's any gift tax required, the donor has to pay the tax, not the recipient. So you shouldn't have anything to worry about.

[emanon1501]

It shouldn't have any impact on your at all, unless there are asset restrictions of some sort.

The check would be a gift so would have no effect on your income. No matter what he writes in the memo (like Joan said)

You're not performing any work, so it's not compensation. It's just a gift. Which the former employer can give $13k/year (as an individual) gift tax free. If they gave directly to the university on your behalf, there is no limit on the amount they can give.

If there's any gift tax required, the donor has to pay the tax, not the recipient. So you shouldn't have anything to worry about.

So, I better off tell him to write a check for 13,000 instead of 15,000, and then both of us will be okay and will not be taxed?

[jpg7n16]

So, I better off tell him to write a check for 13,000 instead of 15,000, and then both of us will be okay and will not be taxed?

Or tell him to write it directly to the school - not to you - as pointed out above by Joan.

Then there is literally no limit on how much he could give you gift-tax free.

(though technically every person has a $1 million lifetime exemption that he'd be able to use on his gift, but most planners try to help people avoid using the lifetime exemption if at all possible - if he gave you $15k, he could do the 1st $13k gift tax free, and then use 2k of his 1million lifetime, leaving him 998k that he could give away over the rest of his life)