Other UnTaxed Income 414(h) Retirement Contributions

Paying for College
1

<p>I am submitting a financial aid appeal due to a one-time income payment received in 2010 which reduced our financial aid by several thousand. My daughter's school requires a copy of our 2010 Federal Tax Return and W-2s as well as asks us to complete a form for 2011 Estimated Income. My questions relate to mandatory contributions my husband makes to a state 414(h) pension plan.</p>

<p>When I first completed the FAFSA back in 2008 I had been informed by a Financial Aid Officer (not from my daughter's current school) that these contributions were not reportable on the FAFSA because they are mandatory contributions. The amount is included in Box 14 on the W-2. I have not reported them in either Line 92a or 92i on the FAFSA. In 2008, I did have to re-send corrected CSS Profiles and FAFSAs to all schools and explained my reason for changing this number to zero and never was told this was wrong. </p>

<p>The Estimated Income Form asks for "Voluntary Contributions to Retirement Plans" and "Other Untaxed Income not listed above". I obviously won't report the contributions in the Voluntary Retirement but should I follow the rules that I have used for line 92i on the FAFSA and report a zero for "Other Untaxed Income"? </p>

<p>I will also need to provide a 2010 W-2 which will show the Retirement Contributions which are noted as 414(h) in Box 14. I would like to reference my reason for not reporting these. Can anyone point me to instructions that clearly state that these mandatory contributions are not required to be reported as either Retirement Contributions or Other Untaxed Income? I read one post that someone tried to clarify this with a FAFSA Rep but no luck. I do not see reference to excluding these payments in the FAFSA instructions.</p>

<p>Thanks</p>

2

<p>So far I have found a power point presentation, what looks to be a Training manual and an article by the founder of a financial aid website that mention that mandatory state retirement contributions are not “counted” or “not reported” in Other Untaxed Income. Why is this information so difficult to find, why is it not included in FAFSA instructions? Seams reasonable to add this comment unless there are so many special circumstances for every line that doing so would make the instructions too complicated.</p>

<p>So I either report zero for Other Untaxed Income as I have done on the FAFSA or include the state retirement contributions with a note indicating they are mandatory contributions and therefore were not reported on my FAFSA. They will be on the W-2 in Box 14 that I need to provide to the school.</p>