@kelsmom you seemed to provide definitive answers for the questions posed in http://talk.qa.collegeconfidential.com/discussion/comment/18062559#Comment_18062559 so I wondered if you could help with a similar question.
I am a recently married stepparent to a divorced custodial parent of a sophomore student who is receiving tuition grants from a college who uses CSS/Profile.
My new spouse and I do not and have not ever lived together; we maintain and live in separate homes, with separate mortgages, local tax payments etc. We do not intend to ever change this arrangement. We keep our finances separate, each paying our own bills, have had no children together, and signed a complex pre-nuptial before the marriage freeing each other from any obligations to provide for each other in any way, including in our estates, or to make any provisions for the welfare or education of each other’s children.
In all aspects this is a marriage where we 'have chosen to lead separate lives" as the FAFSA help documentation puts it.
My spouse will be filing her tax returns as “Head of Household” and I will be filing mine as “Married but Separated.”
My questions are:
-
For both FAFSA and CSS/Profile, is “separated” the correct marital status?
-
For both FAFSA and CSS/Profile, will the divorced biological father will remain as the non-custodial parent and I should not add myself as a stepparent?
-
For both FAFSA and CSS/Profile, there is no requirement that I provide any data or make any sort of appearance in either application?
-
Are the above IRS filings correct? Or should I file as Single because there is effectively only a technical marriage.
Many thanks for any answers you can provide.
OK, this is fascinating. Sorry, I can’t help but ask: why did you get married?
You are not separated due to the eventual dissolution of the marriage.
Your intention is to stay married. You will have to file married. For your children one home will be the primary residence and the other home will be an asset.
Financial aid does not care about your pre-nup. Remember your FAFSA will ask for the date of your marriage and the date of your separation. You are going to get flagged for verification. You will eventually have to file as married, because you are separated due to convenience.
I agree, why did you get married? It seems like you want to have your cake and eat it too.
This may not end well for either one of you. RIght now she will have the most to lose because her son will be at risk of being tossed out of school due to misrepresentation or having to repay all of the financial aid due to fraudulently receiving it.
This one is too sticky for me to answer, to be honest. I would suggest you contact the school to speak with an aid advisor. This is such an odd situation that I imagine the school would need to interpret the situation based on its policies, or they may even want to request a response from the Department of Education.
Glad I am working at a grad-only school these days! 
What do you mean by “only a technical marriage”?
Unless you and your spouse have a divorce or separate maintenance decree, something which is determined by the applicable state law (and which your pre-nup agreement is not), neither of you can file a federal tax return as single. The choices, depending on the circumstances, would be: married filing jointly, married filing separately, and head of household.
I think this might be/can be the correct filing status. You have to work through the definition section. I agree that there is no ‘technically single’ status. You will lose certain tax credits by opting to file separately.
I also don’t think you are separated (or more importantly, the mother is not separated). You are married and intend to remain married. My sister is in the same situation although her husband is not a stepparent but a bio one. They have separate households and separate finances. They live separately for work reasons as his work is about an hour to two hour commute away (it’s in the mountains, and weather can make it impossible to get there from the city). Anyway, they have to file FA forms per the definitions. They are married, they have two homes, therefore they get dinged for the second home.
Note that in a case involving MFS taxpayers, where the question was the taxability of Social Security, “spent a single night under the same roof” was enough to blow the “have you lived with” question. HoH is not necessarily the right conclusion to reach, and the plain-language explanations are not going to be helpful to your situation.
You can file Married Filing Separate all you want. Your spouse should seriously consider getting a written opinion from a tax attorney, a PLR, or filing a Form 8275 regarding Head of Household status.
While you were coming up with all of this complex legal planning, no one thought to figure out the financial aid and tax consequences? That’s pretty unfortunate.
Why did we get married? For the health insurance of course!
for what it’s worth, the marriage could very well be dissolved when company-provided medical insurance becomes unavailable, which is not that far off as we are not spring chickens.
I am aware of the lack of force of a pre-nup. I mention it only because demonstrates that there is no real financial connection between the two us. This is reinforced by the permanent disabled status of my special needs child, which has resulted in most of my assets being placed in trust for her (however not yet an arms-length trust).
I understand that the rationale for including stepparents in the asset counting is that the stepparent shares a home AND living expenses with his spouse and stepchildren and thus it makes sense that he should share the education of the children he lives with. But that is not the case here. We share nothing.
But this is just railing against the unfairness of things and is not productive.
@Kelsmom, your advice is to contact the school ahead of time. There’s less than a month before the close of submissions anyway. How solid are you in that advice.
@Sybbie719, does your status as super-moderator imply that you have an inside track. I saw that Kelsmom is a financial aid officer. How about you?
To clear the air a little, it is CSS/Profile rather than FAFSA that I am really concerned about. To let a cat out of the bag, it’s Harvard.
@Allyphoe, can you please point me at details of the social security case you mention.
Many thanks.
Unfairness on the part of who or what? Putting aside any compelling details about why this may have been the best way to qualify one or more people for better or lower cost health insurance, in the end it’s still a sham marriage that has ethical and legal implications. Who’s not playing fair?
@twoinanddone Your sister’s case concerns living apart for reasons of employment. The employment reason is specifically mentioned by the IRS as a non-applicable case. I quote the FAFSA Help on marital status below:
"Separated,” for FAFSA purposes, includes a married couple who is considered legally separated by a state, or if the couple is legally married but has chosen to live separate lives, including living in separate households, as though they were not married. If your parents are separated but living together, select “Married or Remarried,” not “Divorced or Separated.”
Note: When two married persons live as a married couple but are separated by physical distance (or have separate households), they are considered married for FAFSA purposes.
We did choose to live separate lives, physically and financially, and I don’t consider we live as a married couple, because even though we live apart, there are none of the other trappings of marriage present.
I’m not an expert, but I think you should talk to the Fin Aid office. My nephew’s Bio parents were married but with separate houses and were dinged for that at Williams. They talked to the office and ended up with a very nice financial aid package. (Both parents were close to retirement age and that may have entered into it as well.)
From that language, it appears for FAFSA purposes that you are separated. However, I wonder if you will be considered the non-custodial parent for purposes of the CSS profile.
This is like a law school exam question.
@suzy100
I don’t believe step parents are ever considered as non-custodial parents on the Profile.
But that does beg the question…does this student have a non-custodial parent in the mix.
Given that one of you is helping the other with health insurance, perhaps the other could help make up the difference in college financial aid caused by the marriage.
I’m surprised to learn that it sounds like a step-parent is financially responsible for a spouse’s child. I thought the step-parent would need to legally adopt the child for this to be so. Or is this just an issue of FAFSA counting assets?
<<we did="" choose="" to="" live="" separate="" lives,="" physically="" and="" financially,="" i="" don’t="" consider="" we="" as="" a="" married="" couple,="" because="" even="" though="" apart,="" there="" are="" none="" of="" the="" other="" trappings="" marriage="" present.="">>
Not really financially independent if health insurance is the factor. Health insurance seems to be financial.
In a way, it’s FAFSA making a determination of how much of a custodial parent’s income and assets is available to pay college expenses after household needs are jointly met.
The FAFSA computes an expected FAMILY contribution…so if a custodial parent remarries…the new spouse is a member of the family for FAFSA purposes.
And for Profile purposes too.
Some schools do treat step parent income differently…but most are private schools that use the Profile and non-custodial parent Profile…and use the bio parent incomes.