<p>I am filling out FAFSA's for this year and we have different circumstances - I am very confused!! My husband was on disibility for 4 months, worked for the next 4 months and was laid off the last 4 months of last year (collecting unemployment). We use the 1040 with itemized deductions. My girls both have a 529 and along with scholarships only had to take out the $1750 stafford loans to pay the difference. Since their scholarships are less then the total tuition, I assume I am able to take the education credit on the $1750 loans? I figured that the 529 money goes towards the balance of the tuition and the room and board and books that are not covered by scholarship. When I put it through Turbotax (we cannot afford an accountant this year) it is giving me some education credit. I am not sure how it figured it, but they were both different amounts. I am assuming I can list this on my taxes since they did not make enough money to file a return? Do I still have to list what they made on my taxes as well? </p>
<p>Now on to Fafsa - my husband is a dislocated worker and our AGI is 48k - does that give us some exemption on filling out assets? Also, where do we list the balance of the 529's and are they our assets or the girls assets when filling out the Fafsa? I thought that 529's are allowed to be listed as parents assets, but looking at the Fafsa it asks the student if they have a 529. I guess I am reading too much into this and have really confused myself. Any assistance will be appeciated!!</p>
<p>ok, so I read through the instructions again and realize that the 529 funds are listed as our asset (on FAFSA) since they are our dependents, but still confused on the other.</p>
<p>The tuition paid with loans is eligible for the credit. Tuition paid with the 529 account money is not. Not sure what you mean by they were calculating different amounts. Unless perhaps the credit for one student wipes out most of your tax liability? The AOC is a partially refundable credit (40%) meaning you can get part of it even if you have no tax liability, The non refundable part only wipes out actual tax liability. </p>
<p>For instance if your tax liability for the year is $1800. If you have 2 lots of eligible expenses of $1750 each. On the first you would have $1050 non refundable credit (1750 x 60%) and 700 (1750 x 40%) refundable. So your tax liability would be reduced by the non refundable credit of $1050, and the $700 would show up as a refundable credit (the credits show up on different lines of your return). This would have reduced your tax liability to $750. When you enter the second lot of $1750 expenses it would again calculate the non refundable credit of $1050. BUT as you only have $750 remaining tax liability it would wipe out that liability but you do not get the rest of the non refundable credit as it is non refundable. You would still get the full refundable part of the credit of $960. So you would end up with $1050+750+700+700 = $3200 (you can not get the other $300 non refundable as you do not have enough tax liability). </p>
<p>Does that make sense. It is hard to explain, and it is early!</p>
<p>The 529 accounts are reported as parent assets.</p>
<p>If the parent AGI is less than $50,000 and your husband is a dislocated worker you should be eligible for the simplified needs test where assets are ignored. You may still have to report them though. This varies by state. (we have to report them in our state even if we qualify for simplified needs or auto 0, but they are not used by FAFSA in calculating the EFC).</p>
<p>Thanks for the clarification on that!</p>