Yes, if the grant/scholarship amount did not exceed Qualified Education Expenses and you did not elect to make any of it taxable (for instance, to be able to claim the AOTC), it should not have been entered on FAFSA. However, if there was taxable scholarship income that was attributed to the student, it needs to be entered on the student section of the FAFSA.
If the tuition was over 40k and she had 21k in grants, then why did you only have an education credit of $1,500? Isn’t the maximum credit $2,500 for qualifying expenses of $4,000?
Ugh, okay now I’m even more confused. When I was doing the taxes and FAFSA I had a thread about this here: http://talk.collegeconfidential.com/financial-aid-scholarships/1738258-fafsa-question-under-parents-income-scholarship-grants-for-kid.html#latest
I think I got caught up in the 1040 issue and AOTC (which we DID get) amounts and forgot about the original question. Which you guys seemed to have answered as, “don’t enter anything unless the grants were higher than the tuition paid”…
or am I misunderstanding again?
To be clear, on my 1040 (we used Turbotax) we did enter the tuition and grant amounts off of the 1098-T in OUR (parents) tax return, and we received the AOTC. Tuition paid in 2014 was higher than grants received. Should we be reporting any of the grant money in the FAFSA? If so, where?
Only the non-refundable portion of the AOTC (up to $1,500) is reported on the FAFSA.
(edited because MiddKidd86 explained that part, thanks!)
It only gets entered on FAFSA if it was included in AGI on the tax return of the person who received it. It doesn’t sound like that was the case with your student, so it doesn’t get entered on FAFSA. If your student did have a taxable scholarship amount included in the AGI of his/her tax return, that amount would be entered on FAFSA line 44.d.
OK, thank you. That explains everything then. Boy do I feel dumb.
I logged into the FAFSA and made the correction and it increased our EFC to 8,500. Boo hoo!
Oh ok, thanks for the explanation. I was just wondering why you didn’t get the full credit. But didn’t think about that it was reducing your taxes.
Never mind, missed post #26 that you have manually updated the fafsa.
You are far from the only one who has made this mistake. It is so common that it makes me wonder if the instructions need to say … hey, look at your tax return - if it doesn’t have an amount on the first page of the form that says “SCHOL” do not put a number here.
^ I totally agree. It is very confusing!