My HSA contribution is withdrawn directly from paycheck. It looks like I don’t need to report it on FAFSA but have to on CSS. Is it correct? Thanks
I don’t have an HSA, but wouldn’t it be reported the same as 401K and FSA contributions that are directly withdrawn from your paycheck as untaxed income in question 92a?
@BelknapPoint do you know?
On the 2020-2021 FAFSA, question 92.a. is for reporting payments to tax-deferred pension and retirement savings plans. An HSA is not a tax-deferred pension or retirement savings plan, although some people use it that way. The FAFSA instructions provide that amounts under specific W-2 box 12 codes need to be reported here, but the box 12 HSA code (W) is not one of them. Tax deductible HSA contributions that are not made through an employer-sponsored cafeteria plan do need to be reported on FAFSA: either through question 44.h. (for the student), or question 92.h. (for a parent). It does seem inconsistent that FAFSA requires one type of tax-preferred HSA contribution, but not another, to be reported as untaxed income. Also, I can’t speak to the 2020-2021 Profile, but on the last Profile that I am familiar with (several years ago), reporting of all tax-preferred HSA contributions was required.
@BelknapPoint - I guess I was focused on the “not limited to” part of the instructions when it listed the codes.
“including, but not limited to, amounts reported on the W-2 forms in Boxes 12a through 12d, codes D, E, F, G, H and S”
Does this mean FSA contributions are not included either?
The question is specifically asking for payments to tax-deferred pension and retirement savings plans to be reported. HSA and FSA accounts are not, by definition, tax-deferred pension or retirement savings plans.
Hmmm…guess I messed that part up then.
The only line to report HSA contribution is Question 92.h. The instruction says: “Also include the untaxed portions of health savings accounts from IRS Form 1040 Schedule 1-line 25”. Since my HSA contribution is deducted directly from paycheck, the amount on 1040 Schedule 1-line 25 is 0 for me. So I don’t need to report my HSA on FAFSA, which agrees with what you wrote before:
“HSA contributions that are deducted from pay as part of a cafeteria plan are not reported on FAFSA. Extra HSA contributions that are deducted above-the-line on Form 1040 line 25 are reported in FAFSA question 94i (“Other untaxed income not reported such as workers’ compensation or disability benefits”)”.
Please confirm.
Thanks
On CSS Profile, there is a line specific for HSA. Its instruction says:
"HSA benefits may be provided by employers. Account holders and/or their employer may contribute to the account; pre-tax contributions should be reported here.
Do not report the HSA deduction (IRS Form 1040, Schedule 1, line 25) amount here; that amount is reported in the Parent 1040 section".
It looks like my pre-tax HSA contribution needs to be reported on CSS. My employer contributes about $1350. Should I include that money or just my contribution?
Thanks
@BelknapPoint and Others:
Every online article suggests submit FAFSA and CSS Profile as early as possible but how early is early? I plan to submit them around Oct. 20. Is it early enough?
Another question: if my son submits his college applications much later than my submissions of FAFSA/CSS, is there any advantage of my submitting FAFSA/CSS early? Thanks
THIS is my huge pet peeve with FAFSA. Husband and I are each self-employed as sole proprietors. We have a non-employer HSA, and we contribute the maximum every year. I always include a special circumstances letter that points this out (among other things). I cannot, for the life of me, imagine a rationale for differentiating between employer-sponsored HSAs and non-employer-sponsored HSAs. It’s not a loophole for the self-employed. It’s an even playing field.
I would like to know about this too. Still not done with both FAFSA and CSS Profile and earliest deadline is Nov 15. I am under the impression, we will not loose anything as long as we file by deadline date. Is that correct?
Secondly, we are only going to add EA schools for now. At later dates for any RD schools that we add later, will we have to update FAFSA / CSS Profile for latest financials or is this filed only once a year and stays effective?
Thanks.
Some schools use the date of filing to distribute FA that is limited. For example, if a school doesn’t have enough work study dollars to help every kid applying for FA, those awards MAY go to the student who filed first. Some schools have a ‘priority’ filing date (Jan 1? Dec 15?) and will consider all FAFSA/CSS filed before that priority date.
I did know a mom who was convinced if she didn’t submit the FAFSA a few minutes after midnight on Jan 1 that her children would get no SEOG or work study because it ‘ran out immediately.’ I don’t think it was that restricted but maybe she knew people who filed Jan 2 who didn’t get anything.
You have to know your school’s method and if you are eligible for limited need based aid or even merit if merit is awarded by date of application.
@twoinanddone referenced a January 1 filing of the forms for early consideration in the above post. Keep on mind that this is an old early filing date.
The FAFSA and Profile are both available for filing on October 1 of your student’s senior year in high school. As noted, there are some forms of federally funded aid that have limited dollars per campus…federal work study and SEOG (not all schools even have this). These are usually awarded in a first come, first served basis, and yes…applying later might mean that these funds have been used up.
Most important is to file prior to the deadlines for your colleges. You need to check each one. Some schools have early priority filing deadlines for EA students. ED applicants have an early filing deadline. Don’t miss these deadlines.
Even for regular decision, it’s usually better to file earlier. If you are selected for verification, then you will have ample time to get this sorted out.