I saw a thread a couple of year’s ago talk about this subject, but I did not see any definitive conclusion. Doing a Google search also did not yield anything certain. I did find one site that said NY adds retirement income (edit: meant contributions here) back into AGI similar to the way it is done for Expected Family Contributions. That site was a financial firm and I have no idea if they got it right. Does anyone know definitively if contributions to a retirement plan reduce household income to qualify for NY’s Excelsior Scholarship?
Can you please clarify what you mean by “retirement income?” Your title leads me to believe you are asking about untaxed contributions to retirement accounts, rather than retirement income. If this is correct, I don’t believe they would be added into income. The reason I say this is because from the information on the state website, it appears that the information they use is NY state net taxable income. The information specifically says to include retirement income (pension & IRA distributions). I don’t see anything asking for untaxed contributions to a retirement account, though.
Yes, I meant untaxed contributions to retirement accounts. For example, my yearly contributions to my traditional 401K account (not a Roth 401K). Not sure why I wrote it as I did.
I agree the wording on the website implies it would not be added back into income. But, at least one website I saw said differently. Intuitively, it doesn’t seem crazy to me that they would add it back in.
I found this, which explains what information is needed. I don’t see anything on it about reporting that amount: NYS Higher Education Services Corporation - How to Fill Out the TAP Application 2019-20. The document explains how to report student income, and I assume parent income would be reported the same way. It asks for a line on the NY state tax return, and it indicates that there is a box to check if they received pension income. I don’t see anything about retirement contributions. Someone who knows for sure might chime in, eventually.
Thanks for finding that. I agree, it does seem like retirement contributions are not part of the equation. If no one chimes in, I will follow up on this thread as we are in that situation for next year. My 2019 (Edit: another mistake, I meant 2020 here for the 2022/23 school year) AGI is $120K. Adding my 401K contributions would put us over $125K. I already filled out the FAFSA and TAP and I believe there is a separate application for the Excelsior scholarship that is not available yet. This is my first year where I have a child going to a SUNY school and may be eligible for it.
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@sybbie719 do you know?
I do have another related question that I think I know the answer, but again not sure. Assuming we are eligible for my child’s first year of college, let’s call it year 1, I know we won’t be eligible for year 2 because of the income requirement. However, we very well may be eligible in years 3 and 4. I saw in the FAQ section on the hesc website that once you have a year where you don’t meet the 30 credit/year requirement, you are out of the program. There is an appeal, but generally you can’t get back into the program after being out a year due to the credit requirement. I am wondering if that is true for the income requirement as well. In other words, would we be eligible for years 3 and 4 in my example above. This may affect whether I contribute to a Roth 401K or a traditional 401K going forward.
your before tax contributions 401k, 403b, TDA, etc are added back in… Remember you are using your gross income.
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I am a little confused where everyone is getting there information. kelsmom said “NY state net taxable income”, but I think that is used specifically for the TAP which is not the same thing as the Excelsior scholarship. sybbie719 is saying “gross income”, but I don’t see that mentioned anywhere. From the hesc website: “have a combined federal adjusted gross income of $125,000 or less;”. In the FAQ, it says: “How much income can my family earn to be eligible for an award? Your household federal adjusted gross income (comprised of parents’ and student’s income) can total up to $125,000 to be eligible.” https://www.hesc.ny.gov/pay-for-college/financial-aid/types-of-financial-aid/nys-grants-scholarships-awards/the-excelsior-scholarship.html
Again, I personally can fully understand why they would add it back in. I just can’t find a source that indicates that they do.
@sybbie719 is definitely knowledgeable on this topic, so her advice will be better than mine.
Kelsmom is a former financial aid supervisor so she knows a lot about federal financial aid rules, but sybbie719 is our go to for questions about NYS aid.
If you lose the Excelsior Grant I wouldn’t expect to get it back. I don’t believe funding is guaranteed for all students who are eligible, so if you lose it based on income I don’t know how you’d appeal that. The decision to rescind the grant would be correct based on the rules. You could try, but I’d be prepared to cover the difference in case your appeal is rejected.
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I am not on here all the time, but I am on enough to greatly respect kelsmom and sybbie719. I have seen countless numbers of their posts help people. The fact that they share their expertise is a real tribute to both of them. I did not mean any disrespect. It just seems that the directions are pretty clear, so I’m just trying to learn.
BTW - I did find one source from a school that states that if you lose the scholarship because of income, you can get it back in future years. Here’s the quote: “A student who loses eligibility for the Excelsior Scholarship is not able to regain that eligibility unless it is due to the total family federal adjusted gross income exceeding the maximum limit. In such cases, the student can regain eligibility in any future years in which the income is again within the maximum limit.” https://www.esf.edu/financialaid/excelsior.htm
I know no disrespect was intended. Financial aid can be a complicated thing. You’re smart to ask questions.
Save everything you find about the Excelsior. One of my kids lost their grant after their first semester because their advisor signed them up for a class they (mistakenly) thought was required. It was beneath my child academically so they dropped it. If they’d stayed enrolled they would have lost the aid because the class wasn’t required, but dropping the class also triggered the loss of the grant. According to the college catalog our child wasn’t even eligible for the class (based on test scores), so the college should never have allowed the class to be added. We copied that information from the catalog and used it our appeal. We won, but the process took months. If you can find rules pertaining to your situation, download them and save them in a file.
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You do realize that there are going to be some serious cuts to the NYC and NYS budget next year. Who is to say that there will be enough money to fund Excelsior? The state will fund TAP, but there are no guarantees about Excelsior. In addition, everyone who is eligible does not necessarily get an award.
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That was my understanding also. Not everyone will get the Excelsior even if they meet the eligibility requirements. We make too much to qualify for TAP and aren’t eligible for much Pell either, so we really need the Excelsior. But I think if we ever lose it again we won’t get it back. I’d do everything I could to meet the requirements all 4 years.
They are always talking cuts, so not surprising. I was not aware of anything specific. I also did not know that you can be eligible but not get the award. Thanks to all who responded and the opinions. We will certainly apply for next year and I will update this thread with the results. Tougher decision I have to make starting Jan is to fund my Roth 401K (my preference at this point) or to fund a trad’l 401K to keep my options open for years 3 and 4.
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