Where on the CSS is a grandparent 529 accounted for? There is a question asking how much a relative intends to contribute to the academic year. But is there a place to state that the account exists and how much is in it? (For example, the grandparent may chose to reserve that money for graduate school)
If you don’t know about it you can’t report it, and a grandparent has no legal or ethical obligation to inform a grandchild (or the grandchild’s parents) that the grandchild has been named as the beneficiary of a grandparent-owned 529 account.
That being said, it’s been a number of years since I completed Profile, but I don’t recall any question that asked specifically about 529 accounts owned by someone other than the student or a parent.
Agreed. I also don’t recall anyplace where grandparent owned 529 accounts must be reported.
@BelknapPoint can clarify…but I believe if the grandparents give money from this account to pay college costs, it will need to be reported on both the FAFSA and profile in subsequent years.
@thumper1, the new FAFSA rules affect reporting of relative’s payments from 529. Beginning on 2023-24 FAFSA, the grandparent payment won’t need to be reported on FAFSA. That means anything paid for student in 2021 from grandparent 529 won’t be reported (since 2021 would go on 2023-24). Profile might still ask for it to be reported … I don’t know.
That’s right…I forgot that money paid on behalf will no longer be reported!
It’s hard to get used to such a big change! The caveat, as usual, is that some schools may consider it (via Profile or their own form) … but then again, they may not. The best way to know is to ask the school.
The issue has been that money from grandparents would be reported as untaxed student income, which could reduce aid by 50 percent. One workaround has been for grandparents to wait to contribute until spring of sophomore year when it wouldn’t have to be reported because of the prior-prior year rule.
Thank you for clarifying. I am trying to figure out where it is accounted for on the CSS. I don’t see a specific question about relatives 529s. I only see a question about how much a relative intends to contribute in the upcoming school year.
I believe it is accounted for after the distribution is made — untaxed income for the student.
T was accounted for in future years as payments made on your behalf (the student’s behalf). But with prior prior year and the change in what is included on the FAFSA, this won’t appear on the FAFSA at all…
Right @kelsmom
Yes, correct for FAFSA. Anything from this year on won’t be reported due to changes effective 2023-24.