1.) I am a municipal employee and am not sure if my pension contributions are considered income on the FAFSA. The instructions say to include income in box 12 of my W-2, but not if the code is “DD - Employer paid healthcare contributions.” My pension contributions are coded DD, but not employer paid healthcare, obviously. The pension contributions are in lieu of Social Security - I don’t contribute to SS and will not be able to collect it when I retire if I remain in the pension plan. The contributions are 10% of my gross income, so it’s a pretty significant effect on our EFC depending on how they are treated.
2.) I included them as income for the 2015-16 FAFSA, but now think that I did so in error. If I need to correct the FAFSA information once it is processed, is it necessary to notify the receiving institutions that the FAFSA is being corrected? Will it be automatically updated for them if there are changes?
You don’t report the mandatory pension contributions.Once the FAFSA has processed, update the info and don’t forget to resubmit. All schools on the FAFSA will get the changes - you don’t need to tell them - they will use the latest transaction. If you want to send to more than 10 schools, first make the income change & send to all the original schools. This will be transaction #2. When that has processed, you can remove schools and add new ones - that will be transaction #3. If you find that you must make changes later - for example, when you update tax filing status to “already filed” from “will file,” - you will need to do it for both transactions #2 and #3.