<p>For FAFSA purposes, our finances are a disaster. One spouse on disability. Last year we had a significant 401k withdrawal. This year will show a (taxable) insurance settlement. These are going to skew our FAFSA income numbers. </p>
<p>The timing on these is terrible but not something we could change. I'm freaking out.</p>
<p>How do we go about filing an addendum or providing further info to show these are not our regular income?</p>
<p>Does not matter. Just like receiving a bonus. It is income and will be counted.</p>
<p>Is your child going to be Freshman in Fall 2013? If so then the 401k withdrawl in 2011 will not matter as only 2012 income and assets is reported. If the taxable insurance settlement is in 2012 then it is counted.</p>
<p>
Ask for Professional Judgment from your school’s FAO</p>
<p>See [FinAid</a> | FinAid for Educators and FAAs | Professional Judgment](<a href=“http://www.finaid.org/educators/pj/]FinAid”>http://www.finaid.org/educators/pj/)</p>
<p>If you are applying to a Profile school, they do ask about income for the past two years, I believe. There is a place on the Profile to include comments/explanations - you could use that section. You can also send an explanation to the aid office.</p>
<p>It’s fine to request PJ if the extra income is in the 2012 year, but remember that an adjustment is not guaranteed.</p>
<p>Though you can request professional judgement on the two years and explain, unless there is a place that the money is going that you can show that is outside of regular living expenses, and are in a disaster/emergency setting, it 's tough from what I have seen to get any consideration. Medical expenses are an area that would be an exception. I do know a family who did use a large insurance settlement directly towards medical costs related to the matter, and it was not counted which makes sense. If you had a series of medical issues and you got money to pay for them, that they are in different years is something that PJ would resolve. </p>
<p>But those who have less urgent issues have not been so lucky. One of my friends had a student take a gap year because a 401/pension whatever withdrawal payment used to start up a business eliminated any need. </p>
<p>Kelsmom, does PROFILE use two years of income or do they use the past year? If someone had a high income in 2011, for example, but qualified for aid, say $20-30K based on 2012 info, how is that ordinarily handled?</p>
<p>Profile is mostly a mystery to me. I only know what I know from completing it myself - I have not worked with it professionally. I think it depends on the school in terms of what they do with their info.</p>