When you complete a Free Application for Federal Student Aid, you’re required to report earned income and the balances of other financial resources you own. If you’re over the age of 24, or under the age of 24 and married or a parent, you are considered an independent student and only need to report income for yourself and your spouse. However, if you’re under age 24 and not married or a parent, you may be considered a dependent student required to disclose financial information for yourself and your parents.
Tax Return Information
FAFSA applications use tax return information as a primary source of income information. Examples of income that may appear on your tax return includes wages from your job or self-employment, distributions from retirement accounts, taxable work-study or scholarship money and investment income from savings accounts or stock sales. If you’re married and file a joint return with your spouse, your income tax return also reports income from your spouse that is required for your FAFSA application. If you’re married but do not file a joint return, you’ll still need to provide your spouse’s income information, but will need to obtain it from his separate tax return.
Cash and Bank Account Balances
You’ll also need to report the balance of your bank accounts and cash-on-hand when you fill out your FAFSA. Although balances may change on a daily basis, you’ll only need to report the balance on the date you complete your application – there is no need to update your FAFSA to report changes in account balances. Include the balances of your savings and checking accounts, minus any part of a balance that is from federal financial aid you already received. The amount of cash to report includes the physical cash you might have in your wallet or someplace at home.
If you’re a parent and receive or pay child support, you’ll report the amount on your FAFSA. If you receive child support, you’ll report the annual amount you’re paid. Do not include amounts you’re supposed to receive but do not, just the amounts you physically are paid. If you pay child support, report the annual amount you actually pay.
Military Pay and Benefits
If you receive certain military pay or benefits, you’ll need to disclose the amounts on your FAFSA. Taxable combat pay and veteran’s death, disability and pension benefits must be reported, as well as Dependency & Indemnity Compensation and VA work-study allowances. If you receive housing allowances from the military, you must report any portion that is not for on-base housing or basic housing allowances.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.