Anyone have any experience with the Princeton NPC? How accurate is it?
Some questions I have:
1B Untaxed income? would this be rent from properties? Wouldn’t that be covered under 1A?
1D Income earned by custodial parent for calculation of FICA tax. Isn’t this answered in 1A?
2B College savings plans…How are you supposed to calculate the value of a prepaid college fund? How much you paid? How much if you cash out?
3A Family size My ex wife and I claim 50/50 on 2 sons so is the answer 3 or 2?
3B I assume is 1 but is it also 1 for non-custodial?
3C would be 1 on both pages for younger sibling?
I’m sure there will be other questions based on some of the answers. They are very explicit on 1A and 1C but vague on other things imo.
The only one I can comment on is family size. Where does this student reside the bulk of the time? If it’s REALLY 50-50…then who provides the most financial support?
If the kiddo resides most with you…then you count him. Same with the sibling.
Rent from properties would not be untaxed income. The most common type of “untaxed income” that is reported for financial aid calculation purposes is pre-tax contributions to qualified retirement programs (401(k), 403(b), etc.) or tax deductions taken for IRA contributions. There are a slew of other types of untaxed income as well.
@thumper1 It is 50/50 but according to the Princeton page I would be the custodial parent since I claim him on the taxes and my ex claims the younger brother on hers. That said we both also list them as dependents since it is 50/50 if I remember correctly.
It would be unusual for dependent status for financial aid purposes to be based on which parent claims the child as a dependent for the purpose of an income tax exemption. Where are you seeing this for Princeton?
Correct. Divorced parents cannot both claim the same child as a dependent for tax exemption purposes. When the return last filed with the same dependent SSN as a previously filed return gets to the IRS, it will be rejected. The same exemption cannot be “split” between parents who file separately, for whatever reason.
@BelknapPoint I’ll try to find it. I looked it up because I didn’t know in a 50/50 who would be considered the custodial parent. Looking at my tax return, only my oldest son is listed as my exemption on the 1040. Both sons are listed on the EIC.
@BelknapPoint Sorry it wasn’t from the Princeton page…it was from Finaid.org under Completing the FAFSA:
" If you did not live with one parent more than the other, the parent who provided you with the most financial support during the past twelve months should fill out the FAFSA. This is probably the parent who claimed you as a dependent on their tax return.
Typically, which parent claims which child as an income tax return exemption is irrelevant for calculating need-based financial aid. This is why I said above that such a linking would be unusual. The FAFSA procedure, which is followed by most schools when distributing institutional aid, is to give custodial parent status to the parent with whom the student spent the most nights over the immediate previous 365 days at the time that the form is filed. If the number no kidding comes out exactly 50-50 between the two parents, the tie breaker is determined by looking at the dollars spent by each parent for the benefit of the student. Parents who maintain separate households, where one parent would not be required to provide financial information for FAFSA, cannot both be designated as custodial parents.
For the student in question, you cannot determine if he/she spent more nights with one parent than the other over the previous 365 calendar days? As the text you quoted makes clear, dependency status on a parent tax return is not the determining factor if the time really is split 50-50.
@BelknapPoint so then I really don’t have a “proper” answer. We don’t keep track of exactly how many days but it is genuinely 50/50. Both of us can/will provide tax returns but I just assume that I will be tabbed as the custodial parent since I do claim him as my dependent each year and she does not and I am the owner of his prepaid college fund. I don’t think ultimately it would make any difference in numbers if I’m custodial or non really.
@BelknapPoint Honestly no…it typically equals out to 84 hours each per week(including time at school). Now sometimes I will get both boys extra nights here and there where she picks up a shift or she will get an extra night from me for the same reason. Unless we sit down and actually figure out how many HOURS exactly it would be then we will have no way of knowing. For the FAFSA I can see where it might matter but for the Princeton NPC the numbers seem to work the same if I plug in myself as custodial or non custodial.
If the time with each parent “is genuinely 50/50,” then clearly you do keep track of how many days the child spends with each parent. “Genuinely 50/50” means the situation that has actually taken place over the previous 365 days; it does not refer to the language in any kind of divorce agreement/custodial arrangement.
Again, which parent claims the child as a dependent for income tax exemption purposes is not a factor.
Ok I’ll just say I have him more by 1 day then. Yes a 50/50 is not declared on divorce only shared…which is 50/50 but oh well. I’m guessing since there is no way to prove otherwise I’ll just claim 1 extra day to add that I claim him as a dependent and I own the prepaid fund. Not sure how to prove otherwise right or wrong. I’m not trying to pull anything I just couldn’t give an honest answer to who has him more without documenting exact hours.
Lol, the next time I share a sandwich or pizza with the boys I’ll have to pay more attention to who exactly got 1% more even though I thought I cut it in half.
Again – tax dependency status is not a factor. The same goes for ownership of a prepaid fund (at least until any money from the fund is spent for the student’s benefit).
You do not have to or need to document “exact hours.” You keep track of where the student spends his/her nights. It’s not hard; you just have to remember to do it. It’s not rocket science.
@BelknapPoint 1. Not saying it is a factor. I’ll just say I paid more expenses and " This is probably the parent who claimed you as a dependent on their tax return.
2. Deal…183 for me and 182 her even though this may or may not be exact. 183 each on leap years but that’s another story.
3. Not rocket science just 4 nights me 1 week 4 nights her 1 week so you tell me who has them more unless documenting the extra nights I get them vs the extra nights she does.
4. Still not an answer to whether it even matters on the Princeton NPC since the numbers seem to be the exact same when I put myself as custodial and her as non and her custodial and me non.