I’m trying to get a grasp on understanding what qualifies young adult children to be dependents for the purposes of qualifying as such for Cal Grant Income/Asset Ceiling limits.
I’m attempting to merge the information I can see with this question:
http://www.csac.ca.gov/facts/2015-16_income_and_asset_ceilings_for_renewing_recipients.pdf
with this:
http://www.ed.gov/blog/2015/01/7-common-fafsa-mistakes-2/
The above article seems more helpful along the lines of what qualifies a student as independent (such as being 24 or older, or working towards a masters or other higher degree, and etc., which is different than what qualifies them as independent or dependent for tax purposes.) This would be helpful of course in that such a student wouldn’t need to enter parents’ income any longer.
But - for the purposes of Cal Grant Income ceiling…. would anyone here know who is considered a dependent? Does it then change to who the IRS considers a dependent?
If the 24 year old is self supporting, you cannot use them for tax or financial aid purposes.
I don’t have a 24 year old.
I was using the age of 24 merely as one of the examples for what could qualify an independent student, even one who is not self-supporting and still considered a dependent by the IRS for standards set by them.
We have 3 young adults, none of whom are self-supporting, and all of whom are still dependents as for as IRS standards go. (We’ve spoken with our CPA about this.)
Our eldest, now 22yo will be applying soon for grad school for '16-'17. Since he’ll be working on a masters, he is considered independent as far as filling out the FAFSA goes, even though he is considered dependent as far as the IRS rules go and us being able to still claim him as we are still supporting him.
Our youngest, now 19, and will be a college senior in '16-'17 is the one I’m still filling out the FAFSA for, and who is still a dependent as far as both FAFSA and IRS goes.
I’m trying to understand what income ceiling Cal Grant will be setting for us for her to potentially qualify for the Cal Grant next year, by trying to understand how many of my 3 young adults who qualify as dependents as far as the IRS goes, will qualify as far as Cal Grant goes.
Hope I’m making sense….
On hold with Cal Grant trying to get this question answered….
There is a separate definition of dependent for IRS and taxes, and for being considered dependent/independent for financial aid, as you seem to know. Not a tax expert but here is my understanding.
The Cal Grant uses the FAFSA for all the information for your younger chid. So the FAFSA qualified dependents would be what you go by for. The FAFSA uses tax dependents to determine your family size.
Claim:
- yourself;
- your parents;
- the number of other children (other than yourself) who will receive more than half of their support from your parents between July 1, 2015 and June 30, 2016; and
- the number of people who are not your parents’ children but who live with your parents and receive more than half of their support from your parents, and will continue to receive more than half of their support from your parents between July 1, 2015 and June 30, 2016.
Thank you, BrownParent. Your understanding of this makes sense to me. Your explanation I believe will help me in making my question more clear to the Cal Grant rep I get. Thank you. : )
Got this question transferred to senior support. You are correct, BrownParent. Thank you.
<<<
. the number of other children (other than yourself) who will receive more than half of their support from
<<<<
@irene joy When you have a grad student who is getting some kind of aid (grants, loans, fellowships), it can be very difficult to show more than half of support unless you’re paying for most of his schooling.
For instance , If a grad student’s COA is $40k per year, then it can be hard to show that you’re contributing $20K+ per year for just that child.
Thank you for weighing in mom2collegekids.
The grad student in question is currently in between undergrad and grad school. He completed his undergrad in June '14 and doesn’t plan to attend grad school until Aug/Sept of '16.
I’m trying to figure out what the determining factors will be as to whether our three young adults (whom we’re supporting more than 50% of their support for in food, lodging, clothing, medical, dental, and other necessities) to be considered dependents as far as dependents are referred to for Cal Grant.
Do they need to pass the IRS test in order to be consider all dependents or another test determined by FAFSA, in order to be considered dependents?
This would be in order to see what our income ceiling would need to be at for our 19 yo to qualify next year for a Cal Grant renewal.
Sharing what I’m finding for anyone else who may be interested. I’m still wading through this stuff.
http://www.finaid.org/educators/irsdependent.phtml
"FAFSA Dependency Status vs. IRS Dependents
Dependency status on the FAFSA is different than dependency status on federal income tax returns. FAFSA dependency status is defined by the Higher Education Act of 1965, while dependency status on IRS tax forms is defined by the Internal Revenue Code of 1986. The definitions are different.
Whether the parents claim the student as a dependent (exemption) on their federal income tax return does not affect whether the student is considered a dependent for federal student aid purposes (or vice versa). The age thresholds, residency requirements and support tests all differ for the two definitions . A student could be financially self-sufficient and file his or her own federal income tax returns yet still be considered a dependent student for federal student aid purposes."
"But when it comes to completing the FAFSA, you want to read each question carefully. Too many students see delays in their financial aid for simple mistakes that could have been easily avoided.
Don’t rush through these questions:
Your Number of Family Members (Household size): The FAFSA has a specific definition of how your or your parents’ household size should be determined. Read the instructions carefully. Many students incorrectly report this number."
http://www.ed.gov/blog/2015/01/7-common-fafsa-mistakes-2/
I think I found what I was looking for. It appears that indeed FAFSA does use a different set of standards than the IRS does for what qualifies as dependents:
This is question 73 on the paper FAFSA.
"To determine your parents’ household size, include:
yourself;
your parents;
the number of other children (other than yourself) who will receive more than half of their support from your parents between July 1, 2015 and June 30, 2016; and
the number of people who are not your parents’ children but who live with your parents and receive more than half of their support from your parents, and will continue to receive more than half of their support from your parents between July 1, 2015 and June 30, 2016."
https://fafsa.ed.gov/fotw1516/help/pnumInHousehold.htm
Yes, it is a different set of standards for the IRS and fafsa. The main difference is the IRS age test for a qualifying child. It would seem your “to be” grad student can’t be an IRS dependent for 2015 because he was over 19 and not a full time student during parts of any 5 months in 2015. And of course the time periods are different.
Sending this question to Cal Grant:
I am inquiring as to definition the CSAC uses for dependent student status in relationship to Family Size for purposes of Income Ceilings to qualify for a Cal Grant.
Does it use the same standards as indicated by the Federal IRS or does it use the standards used by the FAFSA, question 73 on the paper FAFSA using household size?
Dependency status on the FAFSA is different than dependency status on federal income tax returns. FAFSA dependency status is defined by the Higher Education Act of 1965, while dependency status on IRS tax forms is defined by the Internal Revenue Code of 1986. The definitions are different.
Which definition does CSAC use in determining dependency status?
Thank you.
I think you will get a better answer by telling YOUR kid situations and asking how they will be counted for Calgrant residency.
According to 2014 Tax Year 1040 Quickfinder Handbook 4-11, and 4-12, foor the purposes of federal tax requirements of the IRS, a Qualifying Relative is a person who is not a qualifying child of anyone else and who also meets the following 3 tests with respect to the taxpayer. (IRC 152 (d))
1 - Member of household or relationship
2 - Gross Income
3 - Support
Two of our young adult children still being supported by us at home fail the Gross Income test of less than $3,950.
However, FAFSA appears to ask different questions and dependents differently with a different set of questions.