<p>Okay, I'm fessing up, I don't even remember filling out this FAFSA last summer and why on earth I didn't list this money because I'm sure I still would have qualified. My mom and dad, separately, because they're divorced each gave me $500.00/mo. last year. My mom cash, my dad through an automatic deposit. I was going back and looking at my FAFSA because they said my school picked me for verification and realized that I put 0 under untaxable income. My income on my tax return was $6700 and I have three children so this does seem a little crazy. I guess I just always figured this money from them was a gift and could be terminated at any time, therefore was not considered income. Anybody know? I'm happy to go in and put this money in as untaxable income but will I then be in big trouble? What should I do???? I'm really freaked out right now and having visions of federal troopers breaking down my door to arrest me!!!!</p>
<p>Federal troopers will not break down your door. You just need to make an appointment with the FA office at your school and tell them you did not include the gift money because you didn’t think of it as “income” – they’ll make the adjustment and recalculate your EFC. As you’ve said, you’ll probably still qualify for the same aid. I think this is an error/omission that they likely see pretty often. They just need to get the numbers right because they’re accountable to the government. They are not on a mission to hunt down and kill low income students.</p>
<p>Your gift money from your parents is not taxable, so you just need to sort this out with the school, but not change your tax returns or anything.</p>
<p>By the way, verification happens a LOT. It’s nothing personal. We have been verified every year. I have read that 30% of FAFSAs have to be verified, so sometimes it’s just random that you’ll be chosen, sometimes it’s because there are questions about the numbers… but it’s not like a big ugly finger pointed just at you or anything. Don’t worry about it. You’ll be fine. It’s not a big deal, just go in and help the FA office get all your numbers right.</p>
<p>I don’t think you need to report gift money from your parents on FAFSA; as I recall that last part of FAFSA where it asks about money received from other sources specifically says not including parents. But I am thinking about this from a dependent student perspective; if I pay for my DDs college tuition by giving her $10,000 she does not have to report that on FAFSA.</p>
<p>Trying to be logical and think this through. Say a kid graduates UG in the summer, works for the rest of the year, files taxes independently, then has to complete a FAFSA for grad school based on that senior year. If their parents had paid for any of their spring term college expenses, would they report that as untaxed income? I don’t think so? Maybe kelmom will chime in on this</p>
<p>This student is independent (three children), so monetary gifts from her parents do count. However, in this case it may not have made a difference. If the student falls in the auto 0 EFC rules it won’t make any difference. Even if she is 0 without being auto 0, it probably wouldn’t affect the outcome even with reporting the money. I am assuming this is a FAFSA only school.</p>
<p>It is not income from work. It is “other non reported money.” </p>
<p>It is always wise to be honest, even if it doesn’t affect the bottom line (and especially when it does … to avoid problems related to the dishonesty). $12,000 is a lot of money to overlook.</p>
<p>Wow, I agree with Kelsmom. I think I’ll feel better just telling them and even with that income, I’m sure we’re still well below the line. Thanks!</p>
<p>'rentof2,</p>
<p>Can you give us an idea of what to expect when they do a verification?
Other than tax returns and bank statements, what else would they ask you to submit?
And how far back in records do they go? Do they only ask for the previous year?</p>
<p>Kelsmom is the expert of course since she’s a FA officer, but in our experience they only wanted the parents’ and the student’s tax returns, and copies of W-2s and 1099s. The did not ask for bank statements. I have actually never heard of anyone being asked for bank statements, but maybe Kelsmom will weigh in that.</p>
<p>Verifications are quite routine. You just send them what they ask for and normally don’t hear anything more about it.</p>
<p>If they’re only verifying the current FAFSA, just give them last year’s tax docs and whatever else is in the letter they send to you. Don’t send extra documents unless they’re requested. My experience is the same as rent’s - no bank statements were requested - and we’ve been verified by three separate schools.</p>
<p>Thanks 'rentof2 and sk8rmom.</p>
<p>I asked about the verification process because when the CSS Profile asked for the amount of our savings as of that day, I had to undervalue it by about $5000. I knew that I was going to withdraw that amount from our savings because my elderly parents who live in Asia had their house partially destroyed during a strong typhoon. Flood waters had gone inside their house so there was a lot of damage. They had asked me for financial assistance. Even though I had not yet sent them the money at the time of filing the CSS, I subtracted that amount from our report. So now I am worried that if we are verified, they might think I lied about our assets. I did send them the money but it was 2 weeks after I filed CSS.</p>
<p>Will this be a problem?</p>
<p>I can’t imagine it being a problem. Which is not to say you should make a practice of it, because it’s not really correct and who knows if some FA officer might want that information verified someday… but I don’t think you need to worry about it for now. Maybe some with wider experience than mine will contribute their ideas.</p>
<p>For verification to satisfy federal verification guidelines, there are particular items that must be verified. Generally, schools will collect the following to satisfy verification requirements: tax returns with schedules, W2’s (not all require), 1099’s (not all require), nonfiler statements if the person did not (and was not required to) file a return, and a verification worksheet that lists household size, number in college, and a listing of untaxed income as well as some allowable offsets to income (child support paid, work study earnings, etc). Sometimes during verification, questions are raised by conflicting information. If this occurs, by law they must be resolved. </p>
<p>Other things come up that must be dealt with that do not seem related to the items required to be verified - again, though, questions raised in verification must be resolved. A really big problem where I work is incorrect tax filing status. If the parents are not allowed by IRS regulations to file in a particular manner (such as head of household …), we are not allowed to complete the verification until the family files amended returns. They don’t have to do it … but no financial aid if they choose not to. Another issue is child support: If the FAFSA says one thing & the verification worksheet says another, documentation must be collected to resolve the discrepancy (Friend of the Court statements work). There are plenty of times conflicting information is presented during the verification process, and aid officers are required to ask for documentation to resolve the conflict.</p>
<p>Some schools impute assets based on information on the tax return. If a family reports assets much lower than those imputed, the school may request copies of bank statements.</p>