When a parent has a non-taxable monthly payment as part of a long-ago injury-based insurance settlement, how should this be reported in the FAFSA/Profile? My inclination is that the annualized value of the monthly payments would be considered in the non-taxable income. I’m assuming it’s unlikely that this wouldn’t be counted at all, although I don’t think it’s big enough to have major impact on EFC. Anyone here have any experience with this?
All of the threads I’ve found here on CC discuss the issues of a the best way to set up a child’s settlement – but nothing about how to count it when the parent has an existing, decades-old one. Any help is greatly appreciated!