Are Federal Income Taxes on ROTC Scholarships levied?
ROTC-provided benefits, including scholarships, stipends, uniform allowances, and book payments are not taxable as federal income according to IRS Pub lication 3, Armed Forces Tax Guide and IRS Publication 4, Student’s Guide to Federal Income Tax. Normally, the only taxable income that cadets receive from the Air Force is training pay for Field Training or PDT programs. Congress and the IRS reevaluate the tax status regularly. Statutes, regulations, and interpretations can change any time. Therefore, cadets should not be advised that scholarships are guaranteed to be tax free. State rules generally follow federal rules. However, due to the number of jurisdictions, we can not track each state’s tax treatment of ROTC scholarships, benefits, and training.
