Child support and income reporting on FAFSA

Paying for College
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<p>This is my first post. I've been reading selected threads on CC that come up on google searches and did a search of CC forums but am not finding answer.</p>

<p>I'm the custodial parent; have been separated from husband since 2009 but no divorce. My state doesn't have legal separation. I file as Head of Household. Dad gives money that we think of as child support. There is no legal requirement to do so and he is not always consistent about doing it. I have no confidence that it will even continue when she is gone to college. Though it appears that I have high assets, I will be living on my savings for the next 10 years so they have to last. </p>

<p>In 2013 he gave me 19,200. I know my earned W2 income of 6300 goes on Question 85. I keep debating whether to report the money he gave me under Question 93b child support (since its not a legal requirement) versus 94i other untaxed income. Does it even make a difference in the outcome?</p>

<p>Also, daughter earned about $395 total in 2013 from a combination of jobs. I know she doesn't have to file tax return and will mark "not going to file" since she is far from reaching any IRS thresholds. Jobs were $90 from swim team at pool, about $150 as instructor at local manners classes, and the rest from several pet sitting and baby sitting jobs. No W2 or 1099s. I know some say to not even report it at all, but since the jobs are listed on college resumes and apps, it just seems simpler to report this small sum. Has $700 in checking and savings. So, report 395 under Question 45i or 45j or someplace else? Does it make a difference where the 395 is reported? I can't imagine that the sum will have any effect on EFC regardless.</p>

<p>Thanks for advice.</p>

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<p>Oh, she is only applying (and has been accepted at all) to FM only schools</p>

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<p>I cannot answer your question about the best place to report the money your husband gave you as to differnce in your EFC. </p>

<p>That your daughter made the $395, yes, she should report it on the FAFSA. It won’t matter. The $700 will make a difference of about $140 in EFC. Because you are PELL eligible, it appears, it might be a good idea to have her open a savings account joint with you as the primary in SSN and so it would be reported as your asset. You have an asset protection allowance which a student does not, and you are assessed 5.6% of assets over that amount whereas she would be hit 20%.</p>

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<p>If you are still married, you shouldn’t be filing as HOH. You should revise those returns. If you are only making $6300/yr, it shouldn’t matter as to the taxes you owe. The money he gives you for child support is not taxed, nor is it deductible to him.</p>

<p>Fafsa has a designation of ‘married, living apart’ and that is what you are.</p>

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<p>if your W2 income was $6300 and you have no other taxable income, it is likely you will qualify for auto zero EFC and all assets and other income (parent and student) will be ignored. Google EFC formula for the EFC formula which will list the criteria to qualify.</p>

<p>If you do not qualify for some reason, a dependent student has income protection of around $6000. The $395 will have no impact on the EFC either way. The student’s assets are assessed at 20% toward the EFC. If there are any purchases the student is planning before college, make them before filing FAFSA.</p>

<p>Untaxed income and child support will be treated the same way by FAFSA. When child support ends on a child graduating high school (often the case), a request for a special circumstances adjustment for loss of income can be made to each school. In most cases, it would probably be granted. The fact that this is all unofficial might make this a bit tricky as there is no document showing that child support ends on a certain date. </p>

<p>If you qualify for auto zero, the child support will not matter.</p>

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<p>

A separated person can file as HOH as long as the spouse did not live in the household during the last 6 months of the year (and they meet the other criteria).</p>

<p>With a $6300 income, there is not really a tax benefit to HOH.</p>

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<p>The OP can file as head of household if the spouse didn’t live in the home for the last 6 months of the year. From the IRS:
You may be able to file as head of household if you meet all the following requirements.
You are unmarried or “considered unmarried” on the last day of the year.</p>

<p>You paid more than half the cost of keeping up a home for the year.</p>

<p>A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. See Special rule for parent , later, under Qualifying person.</p>

<p>Considered unmarried. You are considered unmarried on the last day of the tax year if you meet all the following tests.
You file a separate return. A separate return includes a return claiming married filing separately, single, or head of household filing status.</p>

<p>You paid more than half the cost of keeping up your home for the tax year.</p>

<p>Your spouse did not live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. See Temporary absences , later.</p>

<p>Your home was the main home of your child, stepchild, or foster child for more than half the year. (See Qualifying person , later, for rules applying to a child’s birth, death, or temporary absence during the year.)</p>

<p>You must be able to claim an exemption for the child. However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rule described later in Special rule for divorced or separated parents (or parents who live apart) under Exemptions for Dependents. The general rules for claiming an exemption for a dependent are shown later in Table 3.</p>

<p>[Publication</a> 504 (2013), Divorced or Separated Individuals](<a href=“Publication 504 (2022), Divorced or Separated Individuals | Internal Revenue Service”>Publication 504 (2022), Divorced or Separated Individuals | Internal Revenue Service)</p>

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<p>swimcat, that person must also be supplying the support:</p>

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<p>If the spouse is still supplying ~$20k in support and she earned $6300, I don’t think she’s met the support test.</p>

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<p>^ Good point!</p>

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<p>The money informally given as child support should be entered as child support on the FAFSA.</p>

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<p>Fafsa has a designation of ‘married, living apart’ and that is what you are. </p>

<hr>

<p>No, it does not have this as a choice. The OP is separated for purposes of FAFSA.</p>

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<p>Your situation is a little blurry because normally when there is ordered child support which ends at graduation, you can show that to the school and they can adjust your FAFSA to reflect that the money is no longer coming in.</p>

<p>"Dad gives money that we think of as child support. There is no legal requirement to do so and he is not always consistent about doing it. I have no confidence that it will even continue when she is gone to college. Though it appears that I have high assets, I will be living on my savings for the next 10 years so they have to last. "</p>

<p>You didn’t ask this question, but I wonder why you would not seek a divorce WITH court ordered spousal support IF your H won’t continue to provide money once the D graduates. You’ve been married awhile, your income is far below his, it would seem that he would have to pay spousal support for at least a few years while you get back on your feet job-wise or whatever. </p>

<p>you don’t need for the divorce to be final for you to get ordered support in the meantime. If your H thinks that your D’s support is about $20k per year, then certainly a wife would need at least that much, too. </p>

<p>I am a little shocked to think that one well-paid spouse could just “cut-off” the other low-paid spouse just because their child has graduated.</p>

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<p>Thanks for responses. It sounds like it won’t really matter on which line daughter’s earnings on student portion and money I received from dad on parent’s portion is reported, as long as I do report it, which is really what my question was about.</p>

<p>Don’t have auto zero EFC. Co-owned rental property with sister in 2013 so have to file 1040. Tried to get her to sell in 2012, which would have protected the assets from evaluation, but she refused due to her foreclosure/short sale of home. Finally sold the co-owned rental property at a loss December 2013, due to her financial emergencies, resulting in my negative AGI. So while timing of sale of rental property hurts me from financial aid perspective, at least I’ve got some peace of mind now that I’m not entangled in her financial mismanagement issues.</p>

<p>I have significant assets that I will need to live on for the next 10 years. I have some medical issues that are being evaluated and I am in charge of handling all my mother’s complicated financial and medical affairs; she has severe dementia so I am totally responsible and it is very time-consuming and not predictable as to when I’ll have to run her to doctors–was weekly this summer. So, I will not be able to “get on my feet” and get a better paying full time job any time soon. I also have some 529 savings. guess I’ll just have to call FAA at each school to explain why my assets are needed for my “income”.</p>

<p>Many courts will not order child support once child is 18, especially if there was nothing in place beforehand. Ex and I agreed to not sell my house for at least a couple of daughter’s first years in college to give her a stable place to consider home. House has not recovered its value from when purchased in 2008 and would sell at a loss now. Ex and I are trying to work out disagreement about proceeds from sale of house. For 17 years, from my salary and savings I paid all mortgage, taxes, insurance, utilities, improvements for house, plus childcare, vacations, groceries. Next 7 years household support was maintained in part, but not totally, by inheritance from ex’s deceased mom. He wants half of house sale proceeds. So, until we can agree on settlement, we don’t want to fight in court and waste assets on legal fees.</p>

<p>Not so much that he would refuse to pay once she’s in college. he’s just really inconsistent and not reliable, though not through any evil intent. He has a terrible memory and is disorganized. This year he paid a large sum to catch up what he forgot to payin 2011 and 2012. I have to report what was actually received, not what should have been received from our informal agreement. His 45K job is in jeopardy; 66 year olds aren’t in demand in the job market, especially his industry. His social security and IRA would barely pay his support, much less anything for daughter. His SS is low because he historically had poor paying jobs. You can’t collect what somebody doesn’t have, even if there is a court order. I don’t want to be mean. Fortunately he lives in an inherited house with no mortgage. </p>

<p>His payments go toward health insurance, daughter’s many lessons and activities, and some of household support. FAFSA filing status is definitely supposed to be Divorced or Separated. Per CPA, there is no question that HOH applies since I support more than half of household from my savings plus income. Want HOH because that is the only way that I can itemize in years when it benefits me or file standard deduction. Married, separately requires both spouses to either itemize or take standard (which I don’t understand since separated spouses frequently agree on nothing!) and my ex is very lazy and likely to take standard even if itemizing is to his benefit. I’ve prepared his tax records for CPA every year, but am at the point that I don’t want to be involved in his taxes anymore. So, HOH is the best way for me to do what I need to do, given the divorce complications and his financial sloppiness.</p>

<p>thanks for pointing out what could have been other reporting status errors but I’m confident that those things are correct.</p>

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<p>How colleges will view all of this can vary, but with the shortage of funds and all of the stories and requests for Personal Judgement waivers, it’s a tough row to hoe in terms of getting exceptions. Your daughter should have some schools on her list (as should all students) that are affordable and will certainly take her. The rest is really a lottery and with financial aid needed, and the issues you have in terms of assets and income, it’s difficult to say what the final resolution will be. What sort of schools does you DD have on her list? Most schools, particularly FAFSA only schools will not meet full need anyways, so it might not make much difference. </p>

<p>The other thing that you might consider, is if there is a huge difference in what your situation would be if your daughter should go to school next year, a gap year might be a good idea. If you can get your assets in order to get an auto zero EFC, that could make a difference. I would run the numbers both ways and see what the difference is. The big difference is the PELL which is a grant of $5600 for those with a zero EFC. </p>

<p>Having to live on your assets for the next ten years unless you are disabled and even then not a sure thing, will not have a lot of sway for fin aid, from what I have seen. Have you run EFC estimators?</p>

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<p>If your daughter is still under 18 and if her dad is collecting social security retirement, she may be able to receive SS too (and you can likely be the representative payee). Just thought I’d point it out in case you did not know about this potential source of money.</p>

<p>For example, if he receives $1000 per month in SS retirement, your daughter might be able to receive $500 monthly (50%) if she is his only child / dependent under age 18.</p>

<p><a href=“http://www.ssa.gov/retire2/yourchildren.htm[/url]”>http://www.ssa.gov/retire2/yourchildren.htm&lt;/a&gt;&lt;/p&gt;

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<p><strong>Have you run EFC estimators?</strong></p>

<p>I have and I’ve also completed the full formula worksheets by hand. I’ll have another post soon since there is a huge discrepancy on EFC on calculators/worksheet and what SAR says.</p>

<p>Applied and accepted at 5 FAFSA only schools. Two privates have offered merit money. Two are state universities. One out of state public will no doubt be too expensive.</p>

<p><strong>If your daughter is still under 18 and if her dad is collecting social security retirement, she may be able to receive SS too</strong></p>

<p>She has been getting SS and it will continue until May when she finishes HS. It does NOT have to be reported on FAFSA or tax returns. It has been very helpful now, but it won’t be there when college starts.</p>

<p>Unfortunately I can’t take a loan to pay my living expenses if all the assets are used for college, and even if I could, I wouldn’t have any way of paying the loan without the assets. The gap year idea is interesting. I don’t know what I could do with the assets but if I didn’t have to file 1040 then would have zero AFC. The losses from the sale of the property were high and CPA told me I’d have to carry forward the loss over several years. I’d have to see if it was worth forgoing the loss to gain Pell. I don’t know if you are allowed to not take the loss or if you are eligible for 1040A if there is a loss that you could take but choose not to.</p>

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<p>there is a huge discrepancy on EFC on calculators/worksheet and what SAR says.</p>

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<p>We are almost 3 weeks into the new FAFSA year, and I haven’t heard of any issues with the EFC formula not be correctly calculated by the processor. I would venture a guess that you are doing something incorrectly as you work through the formula. It can be confusing to do it manually. Or you could have entered something incorrectly on the FAFSA … double check your SAR.</p>

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<p>Other thread…OP has $200,000 in savings, and $125,000 in a 529 account. </p>

<p>There is no question that these two assets are making the FAFSA efc what it is, in my opinion.</p>

<p>But I will post the same thing on this thread as the other. The 529 alone has $125,000 in it. That is $30,000 a YEAR for four years. This should cover an instate public university without difficulty. If additional money is needed, the student can take a $5500 Direct Loan. There is no need to touch the mom’s other savings.</p>

<p>I’m not sure I understand the issue here. This parent has $30,000 a year in a 529 account for college. Surely there is a college that meets that price point in the public universities in their state.</p>

<p>The ONLY guaranteed thing the student might gain by qualifying for the simplified needs test and auto $0 EFC is a $5600 Pell grant. FAFSA only schools do NOT guarantee to meet full need for all, so really, the only guarantee would be that Pell. Is it,really worth it to take a gap year for $5600 in Pell grant money when the parent HAS $30,000 a year already in a 529?</p>

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<p>RE: Post #16 for FAFSA and a child’s SS money - is unspent money sitting in an account on the day the FAFSA is filed counted as the child’s asset or the parent’s (or neither)?</p>

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<p>It is my understanding that it is not counted as income, but is an asset.In our case, money had been mostly spent on her living and activity expenses. She has turned 18, so it is her asset and that’s what I reported for her. </p>

<p>As I feared, in posts above about child support, ex lost his job today, last day Saturday. The business is downsizing. His industry is downsizing. He is 66 and admits that he is having increasing trouble with sales because of his severe hearing loss. So it is not really likely that he will find another comparable paying job. He may just have to figure out how to live on a meager Social Security and tiny IRA. </p>

<p>I assume I should contact FA at colleges to which daughter has been accepted to tell them about 19,200 loss of income. Any idea what kind of documentation they may want? Since this is informal child support and our state does not have legal separation, I’m just not sure.</p>