<p>So my mother became a dislocated worker after the Tohoku Earthquake last year and so she has a very low income to report but she received some money after her mother passed away. The money is now all gone, used to pay for household bills but does she include the money she received on the fafsa? And if so where on the fafsa? Income or ????</p>
<p>The money she currently has as her <em>income</em> on the fafsa is currently low since she became a dislocated worker and it seems impossibly low for a single mother supporting 3 children so I was wondering if I should include the <em>inheritance</em> she received because colleges may become skeptical of her income and how we are living.</p>
<p>If the money wasn’t reported on taxes then I wouldn’t report it on FAFSA, it wasn’t income, it was a small gift to help out during a difficult time.</p>
<p>First, are you US citizens/permanent residents? If not, then you’re not eligible to file FAFSA anyway. If this was an inheritance then I believe it’s reported on line 92 as untaxed income. However if her AGI was under the limit for the Automatic 0 EFC ($23,000) then it’s unlikely you’ll get to that question anyway.</p>
<p>I don’t see a general consensus in that thread and would be more likely to trust the opinion of Mark Kantrowitz than that of Scott Anderson (who seems to base his opinion on IRS taxability, which obviously doesn’t apply to untaxed income). When in doubt, best to ask the college itself.</p>
<p>Why wouldn’t the forms call it out then? FAFSA explicitly calls out the first-time homebuyers tax credit as being considered “other untaxed income”. How many people could this apply to?</p>
<p>
He is looking at the IRS code for guidance on what is considered “income”, whether taxable or not. Without explicit instructions otherwise from the forms, this seems pretty reasonable to me.</p>
<p>There are many ways the form could be worded to indicate you have to report any money you received during the year, as opposed to “income”. The form doesn’t, though.</p>
<p>It gets asked for the student (line 44j), but that line does not appear in the parents’ section.</p>
<p>I am a u.s. citizen by birth, but my parents are both non-us citizens and we have lived in Japan for the last 10 years. I checked a million times, I am eligible for fin aid. My mom was a dislocated homemaker but she sort of had some income by buying and selling random things on the internet, but it was untaxed income, and not very much, our father was the “bread winner” but then they had a divorce, and then the earthquake came, and we decided to move, and then my grandmother passed away, leaving us with a bit of inheritance that is now mostly gone and only about $400 of it remains. </p>
<p>The inheritance helped us pay for the move to another prefecture, for household bills, sibling’s school tuition, a bit of debt we had…</p>
<p>So…reading the replies (much appreciated)…it seems as though…
since the <em>inheritance</em> is mostly used up and she has no guidelines of the IRS since we don’t file u.s. taxes or well any taxes at all, I won’t include it in the income and put the remains of the inheritance in the assets part of my mother’s fafsa. </p>
<p>Is that okay? If any can think of any conflicts that may arise or finds a statement saying that inheritance (even if mostly gone) is definitely included as “income” please tell!</p>
<p>Yes, I think you’ve got it right. If the IRS does not consider it to be income, then its not income. Since all that’s left at this point is an amount of cash, it seems that the cash will be reported on the fafsa as an asset in a savings account. </p>
<p>Your query on ‘what if someone asks how we lived’, it sounds as if you lived from a gift that you received during a tough moment. That’s really not the same as money earned or an income from a profession.</p>
<p>That isn’t really an accurate statement. Please refer to the detailed FAFSA instructions…there are questions about non-taxable income, gifts, etc. that have nothing to do with IRS reporting.</p>
<p>As I said earlier, I think this is a moot point in the OP’s case. Since it sounds like she’ll qualify for the Automatic 0 EFC and FAFSA uses skip logic, it’s unlikely that she’ll even see the question regarding untaxed income.</p>
<p>It is not earned income, so it is not income per the IRS. But yes, it IS income that the family received in that year … it is UNTAXED (and untaxable) income. It is to be added in the untaxed income section. You can always ask the school to do a special circumstances review & see if they will remove it from the EFC formula; you would generally need to show receipts to prove you spent the money (otherwise, they should be able to see it reported as an asset!).</p>
<p>If mom has a low enough AGI, the untaxed income (or any assets) may not even come into play … that is, if you fall into the automatic 0 EFC formula based on AGI & dislocated worker status.</p>