MGIB – Active Duty – FAQ

No. Any veterans’ benefits paid under any law administered by the Department of Veterans Affairs (VA) should not be reported as income to the Internal Revenue Service (IRS). You will not receive a W-2 from the VA.

Per IRS Publication 970:

"Payments you receive for education, training, or subsistence under any law administered by the Department of Veterans Affairs (VA) are tax free. Do not include these payments as income on your federal tax return.

If you qualify for one or more of the education benefits discussed in chapters 2 through 13*, you may have to reduce the amount of education expenses qualifying for a specific benefit by part or all of your VA payments. This applies only to the part of your VA payments that is required to be used for education expenses.

Example.

You have returned to college and are receiving two education benefits under the latest GI Bill:

a $1,534 monthly basic housing allowance (BAH) that is directly deposited to your checking account, and $3,840 paid directly to your college for tuition.

Neither of these benefits is taxable and you do not report them on your tax return. You also want to claim an American opportunity credit on your return. You paid $5,000 in qualified education expenses (explained in detail in (explained in detail here in IRS publication 970, chapter 2). To figure the amount of credit, you must first subtract the $3,840 from your qualifiededucation expenses because this payment under the GI Bill was required to be used for education expenses. You do not subtract any amount of the BAH because it was paid to you and its use was not restricted."

*Chapters 2 through 13 are as follows:

American Opportunity Credit

Hope Credit

Lifetime Learning Credit

Student Loan Interest Deduction

Student Loan Cancellations and Repayment Assistance

Tuition and Fees Deduction

Coverdell Education Savings Account (ESA)

Qualified Tuition Program (QTP)

Education Exception to Additional Tax on Early IRA Distributions

Education Savings Bond Program

Employer-Provided Educational Assistance

Business Deduction for Work Related Education

For more information check with the IRS. This information was taken from IRS Publication 970: http://www.irs.gov/pub/irs-pdf/p970.pdf

The Post-9/11 Veterans Education Assistance Improvements Act of 2010 was recently signed into law. This page listschanges to the GI Bill made by this law.

Effective August 1, 2009, but not payable until October 1, 2011

• Expands the Post-9/11 GI Bill to include Active Service performed by National Guard members under title 32 U.S.C. for the purpose of organizing, administering, recruiting, instructing, or training the National Guard; or under section 502(f) for the purpose of responding to a national emergency.

Effective March 5, 2011

• Limits active duty members to the net cost for tuition and fees prorated based on the eligibility tiers (40%-100%) previously established for Veterans
  • Same limitations apply to spouses of active duty servicemembers

Effective August 1, 2011

• For Veterans and their transferees - simplifies the tuition and fee rates for those attending a public school and creates a national maximum for those enrolled in a private or foreign school
  • Pays all public school in-state tuition and fees;
  • Private and foreign school costs are capped at $17,500 annually;
  • The Yellow Ribbon Program still exists for out-of-state fees and costs above the cap.
• For Active Duty Members and their transferees - creates a national rate for those active duty members enrolled in a private or foreign school pursuing a degree
  • Pays all public school in-state tuition and fees;
  • Private and foreign school costs are capped at $17,500 annually
• Allows VA to pay MGIB (chapter 30) and MGIB-SR (chapter 1606) ‘kickers’, or college fund payments, on a monthly basis instead of a lump sum at the beginning of the term
• Prorates housing allowance by the student’s rate of pursuit (rounded to the nearest tenth)
  • A student training at a rate of pursuit of 75% would receive 80% of the BAH rate
• Break or interval pay is no longer payable under any VA education benefit program unless under an Executive Order of the President or due to an emergency, such as a natural disaster or strike.
  • This means that when your semester ends (e.g. December 15th), your housing allowance is paid for the first 15 days of December only and begins again when your next semester begins (e.g. January 10th) and is paid for the remaining days of January.
  • Students using other VA education programs are included in this change. Monthly benefits will be pro-rated in the same manner.
  • Entitlement that previously would have been used for break pay will be available for use during a future enrollment.
• Allows reimbursement for more than one “license or certification” test (previously only one test was allowed).
  • However, entitlement is now charged
• Allows reimbursement of fees paid to take national exams used for admission to an institution of higher learning (e.g., SAT, ACT, GMAT, LSAT)
• Allows those who are eligible for both Vocational Rehabilitation and Employment (chapter 31) benefits and Post-9/11 GI Bill (chapter 33) benefits to choose the Post-9/11 GI Bill’s monthly housing allowance instead of the chapter 31 subsistence allowance.
• NOAA and PHS personnel are now eligible to transfer their entitlement to eligible dependents

Effective October 1, 2011

• Allows students to use the Post-9/11 GI Bill for -
  • Non-college degree (NCD) programs: Non-college degree (NCD) programs offered at non-degree granting schools: Pays the actual net costs  for in-state tuition and fees or $17,500, whichever is less. Also pays up to $83 per month for books and supplies.
  • On-the-job and apprenticeship training:  Pays a monthly benefit amount prorated based on time in program and up to $83 per month for books and supplies.
  • Flight programs: Per academic year, pays the actual net costs for in-state tuition and fees assessed by the school or $10,000, whichever is less.
  • Correspondence training:  Per academic year, pays the actual net costs for in-state tuition and fees assessed by the school or $8,500, whichever is less.
• Housing allowance is now payable to students (other than those on active duty) enrolled solely in distance learning.  The housing allowance payable is equal to ½ the national average BAH for an E-5 with dependents.
• The full-time rate for an individual eligible at the 100% eligibility tier would be $673.50 for2011.
• Allows students on active duty to receive a books and supplies stipend.

The list below highlights changes of particular interest to School Certifying Officials.

• Reporting fees paid to schools increases from $7 to $12 and $11 to $15 per student per year
• Requires that reporting fees only be used for the purpose of certification
• Standard college degree programs offered at accredited public and private-not-for-profit schools are deemed already approved for VA Education Benefits
• Non-college degree programs, on-the-job training, and flight training programs are now covered (effective October 1, 2011)
• Allows the VA to use SAAs for compliance and oversight duties
• Allows VA to disapprove courses

This answer will be updated when more information becomes available click the "Notify Me by Email if this Answer is Updated" to be advised when changes are made.

Yes, you may be eligible for more than one VA education benefit program. However, you may only receive payments from one program at a time. You can receive a maximum of 48 months of benefits under any combination of VA education  programs you qualify for.

For Example: If you qualify for both MGIB-AD (Chapter 30) and MGIB-SR (Chapter 1606), you can receive 36 months of entitlement at your MGIB-AD payment rate, and then an additional 12 months of entitlement at your MGIB-SR payment rate, up to the maximum total of 48 months entitlement.

If you are eligible for more than one benefit program you must notify us which program you intend to use before enrolling in training.

The policies on this subject vary by educational program.

Please scroll down to your selected program for details on extensions due to call-up.

Post-9/11 GI Bill MGIB-Active Duty or VEAP

If you were eligible for the MGIB Active Duty program or VEAP, and serve at least 90 continuous days on active duty at a later date, you receive a new 10 or 15 year period of eligibility for education benefits starting at the end of your call-up period.

If you served less than 90 continuous days and are discharged or released for a service connected disability, for a non-service connected medical condition which preexisted the later active duty service, for hardship, or because of a reduction in force for the convenience of the government, you will still get a new 10 or 15 year period of eligibility. We may need evidence of active service such as copies of orders or DD Form 214, and doctor's statements or other evidence for medical conditions or disability.

MGIB-Selected Reserve

If your period of eligibility for MGIB-SR has passed at the time of your call up, you will not receive an extension of youreligibility for this benefit. However, depending on the length of your active duty service, you may gain eligibility for education benefits under another program. Please note that VA will pay a maximum of 48 months of entitlement to a recipient under any combination of programs.

Dependents' Educational Assistance

If you are activated during your period of eligibility under Title 10 or section 502(f) of Title 32, VA will extend your period ofeligibility by the length of your active duty plus four months. You will receive a separate extension for each call-up. This type of extension is not subject to any age limitation.

For children entitled to DEA benefits who are in the reserves or National Guard, this type of extension is in addition to a separate extension you would receive for the first period of military service which occurs between your 18th and 26th birthdays. Under that extension, your eligibility period would extend eight years from your release from active duty for thisperiod of service, but not beyond your 31st birthday.

Reserve Educational Assistance Program

There is no specific eligibility period for using REAP benefits. However, benefits generally end once you leave the reserves.

If you are called to active duty and must drop out of school without receiving credit:

• You are entitled to GI Bill benefits through the date you dropped out of school.
• If you were called up under Title 10 (Federal authority), VA will restore the entitlement you were charged for the period that you received benefits. For example, if you were in school one month and had to drop out, you keep the money for that period and VA will add back a month to your entitlement for you to use at a later time.
• If you were called up under Title 32 (State authority), you don't receive the entitlement restoration benefit.
• If you have been overpaid education benefits, VA will not pursue collection action while you are deployed to a combat area.

The Federal Trade Commission recommends the following four steps if you detect suspicious activity:

Step 1 – Contact the fraud department of one of the three major credit bureaus:

Equifax:  1-800-525-6285;  www.equifax.com;  P.O. Box 740241,  Atlanta, GA

30374-0241

Experian:  1-888-EXPERIAN (397-3742);  www.experian.com; P.O. Box 9532, Allen, Texas  75013

TransUnion:  1-800-680-7289;   www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA  92834-6790

Step 2 – Close any accounts that have been tampered with or opened fraudulently.

Step 3 –File a police report with your local police or the police in the community where the identity theft took place.

Step 4 –File a complaint with the Federal Trade Commission by using the FTC’s Identity Theft Hotline by telephone: 1-877-438-4338, online at www.consumer.gov/idtheft, or by mail at Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington DC 20580.

For tips on how to guard against misuse of personal information, visit the Federal Trade Commission website at http://www.ftc.gov/.

You do not have to close your bank account or cancel your credit cards.  You should however take steps to protect yourself against identity theft.  One way to monitor your financial accounts is to review your credit report.  By law you are entitled to one free credit report each year.  Request a free credit report from one of the three major credit bureaus – Equifax, Experian, TransUnion – at www.AnnualCreditReport.com or by calling 1-877-322-8228.

Congress authorized the National Call to Service enlistment option as part of the fiscal 2003 National Defense Authorization Act, which required all of the services to develop a shortened enlistment program and offer incentives to individuals who enlist in the National Call to Service program.

The most common reason a check may be less than the monthly rate is that checks are prorated based on the number of days in the month for which you are enrolled.

For example: Your full time rate is $800.00; however your term starts on August 19th and continues through December 14th. Payment for the month of August would include the 19th to the end of the month. (All months are based on 30 days, somonths with more or less than 30 days would not affect the rate). Thus your payment for the month of August would be approximately $320.00. Payments for September, October, and November would be $800.00 each month and payment for December would be approximately $373.36 (prorated from the 1st to the 14th).

Here are other reasons your check might be short:

• An overpayment was deducted from your payment
• You reduced your training time after you received your award letter

You cannot request education benefits specifically to repay a student loan.

If you’re enrolled and receiving benefits, you can use your benefit payments however you choose, including student loanrepayment.

In general, to be eligible for MGIB-AD (Chapter 30), you must have entered active duty after June 30, 1985, and not declined participation in the program.

An individual's branch of service may offer the College Fund (also known as a "kicker") as part of an enlistment or reenlistment contract, or for other reasons they determine. The College Fund is an additional amount of money that increases an individual's basic monthly benefit and is included in his or her VA payment.

Each service branch (and not VA) determines who receives the College Fund and the amount received. It may be necessary to send VA a copy of your College Fund contract to ensure the correct amount is added to your monthly benefit.

NOTE:Typically, College Fund contracts are found within your enlistment contract.

Contact your military unit or the National Archives to get a copy. Click here to request your military records from the National Archives).

If your WAVE record does not reflect your current enrollment status, it is most likely because we have not yet processed your current enrollment paperwork. This could be because we have not received the paperwork from your school or because we have not had enough time to process it. VA is often overwhelmed with enrollments at the start of each semester and it takes us several weeks to process everyone's enrollments and changes. We appreciate your patience, as we will process everyone's enrollment in the order that it was received.

Reminder: Post-9/11 GI Bill recipients are currently not able to see any enrollment information in WAVE.

What can you do? First, check with your School Certifying Official to make sure your enrollment information was submitted. Then, ask him or her if it has been a reasonable time for VA to have processed it (the school officials should know about how long it is taking VA to process enrollment paperwork). If a reasonable amount of time has passed since the school sent the paperwork to VA, please contact us for details using the Ask a Question feature on the web site (in the Questions and Answers section) or by calling 1-888-GIBILL-1 (1-888-442-4551).

If you fail a class you receive what is called a "punitive grade" for that class. A punitive grade is a grade that doesn’t count as earned credit, but is used in determining a student’s progress toward graduation requirements. This means that the grade you receive counts in your overall degree progress, albeit negatively. Since this grade counts towards your graduation progress you are not required to repay any GI Bill money you received for that class.

You may take the class again in an attempt to receive credit towards graduation or raise your grade for it and you may receive GI Bill payment for the retaking of the class.

If a student drops a course or withdraws from school after the drop period and receives a non punitive grade, VA will reduce benefits effective the first day of the term unless mitigating circumstances are found. Mitigating circumstances are circumstances beyond the student's control that prevent the student from continuing in school or that cause the student to reduce credits.

Examples are:

• An illness or injury afflicting the student during the enrollment period.
• An illness or death in the student’s immediate family.
• An unavoidable change in the student’s conditions of employment.
• An unavoidable geographical transfer resulting from the student’s employment.
• Immediate family or financial obligations beyond the control of the claimant that require him or her to suspend pursuit of the program of education to obtain employment.
• Discontinuance of the course by the school.
• Unanticipated active military service, including active duty for training.
• Unanticipated difficulties with childcare arrangements the student has made for the period during which he or she is attending classes.

When a student terminates or reduces after the drop period and a non punitive grade is assigned, mitigating circumstances are an issue. If mitigating circumstances are needed and adequate evidence of mitigating circumstances is not received with the Notice of Change in Student Status; VA will not pay for the course or courses in question.

If the student has already been paid for the course or courses, VA will create an overpayment (subject to the 6-credit hour exclusion described below) from the beginning of the term, quarter, or semester. If you know what the student’s mitigating circumstance is, concisely describe the circumstance in remarks.

For example, you might enter: “Student withdrew 5/6/11 following Father’s death on 4/30/11.” Submitting the reason for the reduction or withdrawal at the time the change is reported will help the student avoid or reduce an overpayment if the change is for an acceptable reason.

If you're planning to use your MGIB or REAP benefits after you're discharged from active duty, the extra contribution will increase your monthly rate.

Note: If you're on active duty, you can receive up to the amount of your tuition and fees but no more than the rate payable to a person not on active duty.

If you plan on using the Post-9/11 GI Bill the $600 buy-up contribution will not be added to your benefits and will not be refunded.

For more information about contributing to the "buy up," please contact your unit's Education Services Officer.