The Tax Free VA Work Study

Those using their VA approved education benefits to attend school at least 3/4 time are eligible for the VA Work Study program.

VA Work Study

My VA Work Study Story

This is not a terribly new benefit, but I think it’s one of the lesser known. I found out about this GI Bill benefit while I was using 10 months of my father’s transferred GI Bill to attend undergrad at the University of Iowa. I liked to hang around the University of Iowa Veterans Association, a few offices in the otherwise disused Communications Building, just across the street from the main library.

When I first joined, it was mostly disproportionately older student Veterans, those who were legitimately disassociated with the older teens and young 20 somethings classmates. Over the few years I was there, the average age drew younger and younger, drawing in a lot of Army and Air National Guardsmen students who benefited from the Iowa National Guard Service Scholarship–a 100% Tuition Scholarship for Iowa residences in the National Guard attending Iowa colleges.

There were a few particularly passionate senior university and student leaders in the club who were adept at broadcasting many of the benefits of military service and using the Post 9/11 GI Bill. The Post 9/11 GI Bill was only 3 years old when I started my Freshman year at Iowa–the successor to the Montgomery GI Bill which extended benefits to those who served since 2001 and included vastly expanded benefits including housing assistance, a $1000 annual books stipend, and the VA work study option.

While my family had already long tracked the more well-known benefits like tuition coverage for state universities, books stipend, and housing allowance, I hadn’t heard of the VA Work Study.

Photo by Keira Burton

What is VA Work Study?

The VA Work Study program pays students a tax-free allowance to work in VA, university, or other similar offices while they’re using VA education benefits to attend that university at least 3/4 time (i.e. 9 credits per semester). The student is paid at the federal or state income minimum rate wage–whichever is greater and, I’ll say it again, it’s non-taxable income.

Qualifying VA Education Programs:

At the time I was attending Iowa and enrolled in the VA Work Study program, I could work for the Iowa Student Veterans Association–answering the phone, welcoming random people who had found the center, etc–at the $7.25 Iowa minimum wage.

I just want to point out the Iowa minimum wage, now over 10 years later is still $7.25, despite inflation meaning one would have to make $9.42 today in 2023 to have the same buying power as $7.25 in 2013, according to the Bureau of Labor Statistics Consumer Price Index (CPI) Inflation Calculator–but that’s for another post.

Regardless of the fair market value of a $7.25 minimum wage, the work was exceptionally easy and, at 20 hours a week, that was up to $580 of additional non-taxable monthly income. That may not seem like much now in 2023, but back in 2013, that was double my monthly budget for food, clothing, and entertainment.

How much can I make on VA Work Study?

Under the Fair Labor Standards Act, the federal minimum wage is $7.25 an hour, but around half of states and territories have vastly increased their minimum wages beyond $7.25. If you’re attending a university in Washington, DC–the highest minimum wage by state or territory–that’s up to $1,320 of non-taxable income a month.

Here are all the states with a higher minimum wage than the federal minimum wage according to the U.S. Department of Labor current as of 1/1/2023:

  1. Alaska $10.85
  2. Arkansas $11.00
  3. Arizona $13.85
  4. California $15.50
  5. Colorado $13.65
  6. Connecticut $14.00
  7. District of Columbia $16.50
  8. Delaware $11.75
  9. Florida $11.00
  10. Hawaii $12.00
  11. Illinois $13.00
  12. Massachusetts $15.00
  13. Maryland $13.25
  14. Maine $13.80
  15. Michigan $10.10
  16. Minnesota $10.59
  17. Missouri $12.00
  18. Montana $9.95
  19. Nebraska $10.50
  20. New Jersey $14.13
  21. New Mexico $12.00
  22. Nevada $10.50/9.50
  23. New York $14.20
  24. Ohio $10.10
  25. Oregon $13.50
  26. Puerto Rico $8.50
  27. Rhode Island $13.00
  28. South Dakota $10.80
  29. Virginia $12.00
  30. Vermont $13.18
  31. Washington $15.74
  32. West Virginia $8.75
  33. Virgin Islands $10.50
  34. Guam $9.25

Georgia, Iowa, Idaho, Indiana, Kansas, Kentucky, North Carolina, North Dakota, New Hampshire, Oklahoma, Pennsylvania, Texas, Utah, Wisconsin, Wyoming, and the Commonwealth of the Northern Mariana Islands have state minimum wages equal to the federal minimum wage.

Alabama, Louisiana, Mississippi, South Carolina, and Tennessee curiously have no established state minimum wage laws, and therefore revert to the to the Fair Labor Standards Act.

Conclusion

VA Education Benefits are an excellent resource for Veterans and transitioning service members. To really maximize your benefit, consider taking on a VA Work Study program, to earn non-taxable income at the federal or state minimum wage–whichever is greater!

Talk to your Student Veterans of America Chapter and or your school’s Veteran Office for more information. You can also learn more at VA.gov.

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