I wanted to make sure that it was being reported correctly on both FAFSA and CSS, so I made written inquiries of both. Here’s how it went with CSS:
Me:
The student is the beneficiary of a life insurance policy that started paying out in 2013 after the death of the insured person. Instead of taking a lump sum benefit, the student elected to take the benefit in 60 equal monthly payments over five years, earning interest. The interest paid each year is taxable and included in the student’s AGI. Is the part of each monthly payment that represents the death benefit reportable on the CSS Profile form? If so, where is it reported?
CSS:
*Hello XXXXXXXX,
Thank you for your email regarding the CSS PROFILE. You should report the death benefit received as untaxed income in application question SI-160 (Student’s 2014 Income & Benefits). The interest paid each year should be reported in application question SI-135 (Student’s 2014 Income & Benefits).
Should you need any further information, please do not hesitate to contact The College Board.
XXXXXXX
PROFILE Customer Service Representative*