Pensions

Paying for College
1

<p>Are there any pensions that are not included in FAFSA income calculations? I receive several and some are free of state income tax, being State pensions. </p>

<p>Some are reported on 1099-P, others are reported on W-2. </p>

<p>FAFSA seems to equate W-2 income with money earned from working, however this income reported on a W-2 comes from a pension. </p>

<p>I don't think any of this matters. I believe it is all reported as income, along with taxed government disability annuity payments. </p>

<p>Am I correct about this, or is there some room for further research here? </p>

<p>Thanks for your help.</p>

2

<p>My DH receives a pension and also is making withdrawals from an IRA. The FAFSA asks for amounts from specific lines of the 1040.</p>

<p>Since it all is taxable, it is all reportable on the FAFSA as income.</p>

3

<p>Untaxed portions of federal pensions do not have to be reported on FAFSA. Taxed portions do have to be reported on FAFSA. Doesn’t matter how state taxes treat the federal pension, just how federal taxes treat it.</p>

<p>With the federal pension it is not taxed by the IRS unless your other income goes over a certain amount. Once other income hits that cut off then more and more federal pension becomes liable for federal taxes as other income increases. So you may have none of your federal pension taxable, part of it taxable, all of it taxable, depending on other income.</p>

4

<p>It’s really important to pay attention to the tax return line that is requested. The FAFSA instructions tell you exactly which line to use, based on the type of return filed. If you follow the instructions, you will have reported what needs to be reported. Then in the untaxed income section, pay attention to the instructions (again). You will be asked to report certain items. In my experience, too many people ignore the instructions!</p>

5

<p>I think this guy has state pensions, not federal pensions.</p>

6

<p>Look on page 5 under “Disability Pensions” of this irs publicaton if you are receiving a disability pension paid by your former employer. </p>

<p><a href=“Redirect Notice”>Redirect Notice;

7

<p>Your help and opinions are appreciated. </p>

<p>The annuity is from the Federal Government’s Railroad Retirement Board. It is a disability annuity that is taxed except for the portion that is equal to Social Security payments.</p>

<p>Both additional pensions are from State agencies. One is a “qualified pension plan” which is reported on a 1099-P. The other is a State pension which is reported on a W-2. Both are Federally taxable except for the small portion of one which represents the contributions I had made to one of them. </p>

<p>I believe the FAFSA instructions are fairly clear. But I’m always looking for any information specific to my situation that may be helpful.</p>