Are LRAP payments taxable?
No. Beginning with the January to June 2008 payments, LRAP awards will be given as loans (you will receive a promissory note to complete). These loans will then be forgiven at the end of the fiscal year, allowing the payments to be tax free (see IRC 108(f)). For payments made prior to January to June 2008, LRAP payments are considered taxable income. Harvard will send you a 1099 reflecting the payment. If your payment is processed prior to January 1st, the 1099 will be for the prior tax year. If payment is issued after January 1st, the 1099 will be issued for the current year. In order to ensure that you 1099 is received, please make sure you update your contact information if it changes.
