Roth IRA and EFC

[EMM1]

<p>Are funds that a student has contributed to a Roth IRA included as assets of the student for purposes of calculating EFC?</p>

[swimcatsmom]

<p>The balance in an IRA is not counted as an asset for FAFSA but contributions for that tax year (2006 tax year for 2007/2008 FAFSA) are included in income.
Private schools may include it as an asset as they have their own rules about what they include.</p>

[hrtz]

<p>Funds in non liquid accounts are not seen by your financial aid, as you income used will be your adjusted gross income.</p>

[swimcatsmom]

<p>But the years contributions to IRAs that are not in the AGI have to be added back on schedule B on FAFSA

Worksheet B (Tax-Deferred and Untaxed Income) reports income that was not included in taxable income but which are counted during the need analysis process. These amounts will be added to taxable income. This includes the following:</p>

<pre><code>* Contributions to tax-deferred pension and retirement savings plans, such as amounts contributed to 401(k), 403(b) and 457(b) plans. You do not report the total amounts in your retirement funds, only the amount contributed during the prior tax year.

• IRA deductions and payments to SEP, SIMPLE and Keogh plans.

</code></pre>

[somemom]

<p>But, just to clarify for the OP, a Roth was never deducted from AGI, so is not added back in.</p>

[swimcatsmom]

<p>

But, just to clarify for the OP, a Roth was never deducted from AGI, so is not added back in

Good point - I did not even pick up on the Roth part of the question. I think I am answering the same questions too frequently!</p>