Help with CSS Profile

[YoLo2]

@KarenLinkous

As you are filling out the CSS Profile with information from your deceased husband’s taxes, you should only include the life insurance proceeds under one category, either investments or untaxable income. Putting it in both places would result in double counting.

But many things are double-counted as income in the past and subsequent assets in the present on financial aid forms.

I tried to find some clarity as to whether a life insurance payout would be considered income in the first place for the CSS Profile (it’s clear that is untaxed). Many people opine with absolute certainty on forums that it is not income. However, the following poster contacted the College Board themselves and were told that it should indeed be reported as untaxed income (the poster also stated elsewhere in the thread that a college FA officer told them the same thing):

@MiddKid86

I wanted to make sure that it was being reported correctly on both FAFSA and CSS, so I made written inquiries of both. Here’s how it went with CSS:

Me:

The student is the beneficiary of a life insurance policy that started paying out in 2013 after the death of the insured person. Instead of taking a lump sum benefit, the student elected to take the benefit in 60 equal monthly payments over five years, earning interest. The interest paid each year is taxable and included in the student’s AGI. Is the part of each monthly payment that represents the death benefit reportable on the CSS Profile form? If so, where is it reported?

CSS:

*Hello XXXXXXXX,

Thank you for your email regarding the CSS PROFILE. You should report the death benefit received as untaxed income in application question SI-160 (Student’s 2014 Income & Benefits). The interest paid each year should be reported in application question SI-135 (Student’s 2014 Income & Benefits).

Should you need any further information, please do not hesitate to contact The College Board.

XXXXXXX
PROFILE Customer Service Representative*

Based on that, my previous advice to the OP here still stands: to report a payout as both current assets in the current filing as well as past income in a subsequent year’s filing of the Profile. And to also describe this in the special comments section to make the FA office aware of the situation and hopefully get a determination from them that they will not double-count as income and assets in the future.

The likely outcome is that they exclude the untaxed income from the insurance payout(s) and only account for the asset value.