In addition to federal income tax on our earnings, we pay 6% state tax and 2% metro tax. Do we include those in Total Taxes Paid when it comes up in NPC’s, or federal only?
I dug around online and couldn’t find a clear answer. I’m sure it will become self-evident when we do our FAFSA for the first time, but right now we are only doing NPC’s. Thanks in advance!
I believe you use the taxes paid on your federal tax return…which is your federal income taxes only.
Someone else will correct me if I’m wrong.
That’s what it seems like to me @thumper1 - unfair? - unless they apply a multiplier to your federal as a proxy for your state & local.
No, it’s not unfair. The fafsa uses figures that apply to all those applying. It is your choice to live in an area with higher taxes, etc.
I know that seems “unfair” to you…but it’s the same argument folks use when they say they live in a high cost of living area. The fafsa doesn’t consider that either.
Federal taxes take state taxes into account, usually giving a credit. When I lived in California, I paid a lot less in Federal taxes because I paid a hefty state tax. When I lived in florida I paid more in fed. tax because I paid no state income tax.
That’s right @twoinanddone , I forgot about that, duh. Those taxes are in our itemized deductions.
Thanks for the help. :">
For fafsa in the formula guide, tables A1 on page 17 for parents and A7 on page 20 for students give an allowance for state and other taxes.
http://ifap.ed.gov/efcformulaguide/attachments/090214EFCFormulaGuide1516.pdf
The allowance is subtracted in the formula if you care to go through the formula manually.
I presume for institutional aid schools may have something similar but that would be up to each school. Unless the NPC says something specific about other taxes I would only use federal.