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My daughter (US citizen) will be going to college here (US) beginning this Fall. My parents (Indian citizens) want to pay her first year tuition expenses direct to the University. The University supports payments through FlyWire. Are there any tax liabilities that I would have because of this?

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  1. As I look at the bill there seem to be three main parts - tuition, housing fees and meal plan. Do the suggestions below still apply for all three or is it strictly tuition only?

  2. She is currently not a taxpayer. Does the above require to file taxes for 2021? She has no other income.

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You aren't involved. You are neither receiving money from the grandparents nor giving any money to your daughter.

What tax liabilities your daughter's grandparents might be subject to depends on Indian tax law. Your daughter, I assume, is not taxed regardless of the source of the gift.

Related, tuition payments you make for your children are exempt from gift tax, which is why your own payments to the college won't incur a tax liability in later years.

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  • thank you. can you pls update with any info you may have on my additional questions?
    – user16458481
    Commented Jul 16, 2021 at 20:27
  • As far as I know, she still has no income; the money from the grandparents is a gift. I do not know if housing and meal plan payments are considered exempted gifts, but they are certainly still gifts.
    – chepner
    Commented Jul 16, 2021 at 20:32
  • Right. But. A company directly paying tuition in lieu of earned income. Well, that’s tax fraud.
    – JTP - Apologise to Monica ♦
    Commented Jul 16, 2021 at 21:42
  • @JTP-ApologisetoMonica thanks for your response. Not sure where the "company paying tution part in lieu of earned income" comes in. Was that a response to a different question or thread? Here grandparents are paying their granddaughter's tuition out of their taxed income. Thanks again.
    – user16458481
    Commented Jul 17, 2021 at 3:33
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    A bit of a tangent. In your situation, no problem. For a different situation, currently on the news, it (paying tuition) can be part of a decades long tax evasion scheme.
    – JTP - Apologise to Monica ♦
    Commented Jul 17, 2021 at 13:01

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