Your GI Bill: 5 Facts
The GI Bill is not nearly as complicated or confusing as is rumored. From length of time you have to use it to its tax-free status, here are a few facts that you need to know.
Fact # 1: The Montgomery GI Bill is not considered Federal Financial Aid
Colleges and universities do not consider the MGIB financial aid in the traditional sense since it is paid to you, the veteran, instead of directly to the school. Most schools want payment at the beginning of each semester, so you can use your MGIB as your major source of college funding.
Fact # 2: You have 10 - 15 years to use your GI Bill Benefits
Once you've left the service, you have 10 years to use all of your Montgomery G.I. Bill (AD or REAP) benefits and 15 years to use your Post-9/11 GI Bill benefits. While your clock 'starts' when you when you separate, it gets 'reset' if you are recalled to active duty for more than 90 days during that 10-15 year span.. In simple terms, you get 10-15 years from your latest discharge.
Fact # 3: Your VA Education Benefits Are not Taxable
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 or 1099 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.
Fact # 4: GI Bill payments are based on the number of credits you take
Your GI Bill payments are based on several factors, one of them being how many credits you are taking. A full-time MGIB student will receive $ 1,564 / monthly, whereas a part-time student will receive half of that amount.
Fact # 5: You can start and stop your GI Bill education as needed without penalty
So long as you finish within the 10 (or 15) year time limit, you can attend college as your personal and/or employment schedule allows. It's not necessary to remain enrolled in order to maintain your eligibility.