Hi everyone- new here and I am pulling my hair out. On the CSS profile, where do you need to disclose a grandparent 529 with your child as the beneficiary? I have googled so many things and can’t find a good answer!! Do I put it where it asks how much a relative is going to contribute? thank you for any help!!
@BelknapPoint what is the answer to this? Are grandparent owned 529 accounts reported on the FAFSA or Profile?
The balance in a grandparent 529 account is not reported anywhere on FAFSA. Under current FAFSA rules, a distribution from a grandparent 529 account for the benefit of the student needs to be reported as untaxed income to the student, but that requirement will go away when the new FAFSA rules take effect.
As far as I know, a grandparent 529 account with the student named as the beneficiary is not reported on Profile. A grandparent, or anyone else besides a parent, could own a 529 with the student named as a beneficiary and never even inform the student or the parents that the account exists. How could that possibly be reported on a form that the student and parents are responsible for completing? Obviously, it could not be. Also, to do any reporting, the student or a parent would have to ask the grandparent if A) the student is still the account’s named beneficiary, and B) what the current account balance is. The grandparent would be under no obligation to disclose anything about the account. With no disclosure, how is any accurate reporting supposed to be done? Unless the Profile instructions clearly state that the funds in a 529 account that names the student as the beneficiary and that is owned by someone other than the student or a parent needs to be reported, don’t report it.
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I think it doesn’t get reported until the funds are transferred to the student and become student income. While it is sitting untouched and not yet accessible to the student, it isn’t reported.
@BelknapPoint is correct - currently, the 529 only comes into play in the year following the year in which a distribution was made to the student. Beginning in 2023-24, distributions from a grandparent 529 will not be reported on FAFSA. It’s possible that the information may still be reported on CSS, but that has not been made public at this time.
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