Hi all, I’m so confused about the new FAFSA rules. Does my husband (child’s stepfather) have to include his income on our son’s FAFSA form? My ex-husband (son’s dad) deducts him on his taxes. I heard there were new rules about this, but I can’t find any clarity about it. Many thanks!
No new rules on this. Yes, the step-fathers financials must be included. For fafsa, it’s irrelevant who takes the tax exemption.
If son lives with you more (even one day more) than his bio father, then your household is reported including your husband and including any child support your receive. If he lives with his bio father, that household is reported.
NO new rules about this. If your son lives with YOU most of the time 50%+, then your husband’s info is included.
It does NOT matter that your ex has your son on his taxes…doesn’t matter AT ALL…never has mattered.
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My son filled out the Common App himself and put “Not applying for Financial Aid” because he knew we likely won’t qualify for any need-based aid. However, we’d like for him to be considered for grants and/or work study opportunities.
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If your son doesn’t qualify for aid, then how could he be considered for “grants” or “work-study”?
Grants and work-study are “need-based aid.” If there is no need, then there are no grants and no WS.
Does the ex- get to claim your child’s dependency exemption every year?
Will the college costs be split equally between you and your ex-husband?
I am asking because your ex- may be eligible to take the ‘up to $2500’ American Opportunity Tax Credit.
So, if you are splitting college costs equally, and ex- ends up getting the full AOTC, then it would be fair if he gave $1250 to you.
The OP had another thread about this…and was advised to contact the schools to change the common app…if the kid was planning to apply for need based aid.
BUT to the OP…do understand…work study and grants are need based awards. You need to have financial need to qualify for them. But YMMV depending on the college. One of my kids had both WS, and a school grant (that the school said was need and merit based), and we were not low income. We thought the kid would not qualify for any need based awards. Of course, it is possible that the WS my kid had was funded by the college directly, and not with federal funds. Some schools do this.
Debbie…ETA…if your kiddo is applying to schools that require the non-custodial parent information, ALL of you will need to provide your financial information…this is done via the Profile and non-custodial Profile, or some schools use their own forms.
So check to see if your kid’s colleges collect financial info from the non-custodial parent.
Also, on your other thread, you indicated your kiddo checked the NO box for applying for financial aid. When he did this, were you expecting to pay the full cost for him to attend his college?
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Does the ex- get to claim your child’s dependency exemption every year?
Will the college costs be split equally between you and your ex-husband?
I am asking because your ex- may be eligible to take the ‘up to $2500’ American Opportunity Tax Credit.
So, if you are splitting college costs equally, and ex- ends up getting the full AOTC, then it would be fair if he gave $1250 to you.
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^^^ Many good points…
Will the ex be contributing to college? If not, and he stops support at HS graduation, then he would no longer be taking the deduction, right? (not that it matters for FAFSA, but it may mean a better situation for your taxes)
…but the ex’s income may be too high to get the AOTC…we never qualified for it…it doesn’t take that high of an income to lose qualification…
…both sides may need to see if one side can qualify for that AOTC.
Right, there are MAGI (modified adjusted gross income) limits of $90,000 for single or $180,000 MFJ.
Thanks, everyone. Thumper: We assumed we’d be expected to pay the full tuition because of my husband’s income. But we can’t afford private school prices. My son’s dad is not in a financial position to contribute anything. If his income is considered, my son would be eligible for more aid. My son is applying to state schools, but also has a few private ones that he’s excited about. I’m just so confused about how all this works.
This has me confused. For schools that use BOTH the custodial and Non-custodial parent income, your son’s aid might be reduced if his father’s income is included in the equation. The aid would not be less.
The schools that require the non-custodial parent form calculate what that parent contribution is. IF your son’s dad has no income, then it would not be an issue. But if he is financially just in debt or otherwise unable to contribute…but has a salary that would support,a contribution, the school will expect one. And if he is remarried, his spouse’s income and assets would be considered as well.
The way it works is that the FAFSA gives you the minimum amount your son and his custodial parent (including that parent’s spouse if married) is expected to pay before qualifying for any federal (or other type using FAFSA EFC) aid INCLUDING workstudy and subsidized loans. That minimum amount is the Expected Family Contribution (EFC). If you want to get an idea of what your EFC is, use one of the estimators to get an idea. If you are the custodial parent (defined as the one with whom your son has lived with the most for the 365 days before filing the FAFSA), then you income, your husband’s income, assets as well as your son’s and any child support received for him would be the info required to determine EFC. Income is what would be the AGI (with some adjustments such as adding back in any 401K or other qualified plan contributions) for 2014. Assets would be market value as of the date you are filing the FAFSA.
If your son was living just one day/night more with your ex than you, then your ex and spouse would be the custodial parents. For those parents who share custody, sometimes they plan which one would be the most advnantageous to be desginated as the custodial parent, and it is ensured that the student lives with that parent than the other. This is independent of who claims the child as dependent for tax purposes and what is designated in the custody papers, as it hinges on actual time spent in the 365 days prior to the filing of the form.
Do be aware, however, that no school guarantees to meet full need as determined by FAFSA EFC. That is pretty much just a minimum. Schools that do guarantee to meet full need use their own forumulas, and it is not unusual for them to require additional info or forms,(often CSS PROFILE), and that may as for non custodial parent info as well as that for custodial parents’.
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We assumed we’d be expected to pay the full tuition because of my husband’s income. But we can’t afford private school prices. My son’s dad is not in a financial position to contribute anything. If his income is considered, my son would be eligible for more aid.
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What do you mean? Are you saying if your Ex’s income was used instead of your H’s? That’s not the case.
BTW…once your son graduates from HS, why would your ex still be claiming your son on his taxes if he’s not supporting him anymore??? I would put a stop to that.
^ If there is a Court Order (or agreement entered as part of an Order) that specifies who gets to take the tax deduction, that is not necessarily dependent on actual support provided. If the father has the legal right to claim the child on taxes, the default is that this continues.
On the other hand, if the parents simply agreed that the father would be the parent to claim the child, without it being part of an Order, then they can end that agreement at any time and the legal right to claim him as dependent would revert to the parent who had primary custody.
Let us hope the parents are (were) mature enough to simply agree that whomever provides the majority of support will take the deduction each year. In many conflicts, this can be a very sore point of adding insult to injury, to provide the clear majority of your child’s support but then be denied the corresponding right to claim your dependent child as your dependent on your taxes.
and the other less- or non-supporting parent taking the AOTC on money the supporting parent paid for tuition! Ouch!
After D1 turns 18, I will not supply the majority of her support unless I can claim her as my dependent on my taxes. If her mother insists on keeping the deduction, then I’ll make sure that is appropriate and that her mother is clearly supporting her more than I am. I have been royally screwed in this subject for too many years, and will not suffer it one day longer than I am forced to. One way or the other, the deduction WILL go with whichever parent provides more support.
If I am not providing the majority of her support or claiming her on my taxes, then she will lose her in-state status at our public schools. That could be a $20k or $30k difference per year if she chooses to go to one of them. I will not take any chances on the state suing me for fraud, they take that very seriously.
From Pub 970 on the AOTC:
I don’t see that one divorced parent can claim the credit based on expenses the other divorced parent paid. The ‘You’ refers to the person filing the return.