<p>Azure-</p>
<p>Yeah, they cancel out. So if you add the $5390 to whatever other income you have to get your AGI (Q35), be sure to list the $5390 on Worksheet C, so the formula will take it away from your AGI before it calculates your EFC. I think that’s the correct way to do it, whether you’re required to file taxes or not.</p>
<p>The thinking is that a student shouldn’t be penalized aid-wise next year for this years financial aid grants.</p>
<p>On the other hand, if you don’t include it in your AGI (Q35), don’t include it on Worksheet C. I think that’s what swimcatsmom is suggesting. It should work out to the same EFC either way.</p>