Student's College Grant and Scholarship Aid Reported to IRS as Income (Question 43d)

Paying for College
1

I just learned that my daughter entered the wrong amount, i.e., $5,000, in “Student’s College Grant and Scholarship Aid Reported to IRS as Income (question 43d)” instead of the correct amount, i.e., $7,450, and now I 'm going to try to fix the error, but I thought I’d get some advice before trying to make the corrections.

Here is the situation:

(1) Her wages in 2019 were $2,600.

(2) After deducting all qualified education expenses, her taxable grants and scholarships were $7,400.

(3) Her Form 1040 - Line 1 = $10,050 [$2,600 in wages plus $7,450 in taxable grants and scholarships]

(4) Her Form 1040 - Line 8b (AGI) = $10,050

Here’s what happened:

When she entered $7,450 in “Student’s College Grant and Scholarship Aid Reported to IRS as Income (question 43d)”, she got an error notice saying something like “amount to high for other amounts reported.”

So she stepped down the number she was entering in to “Student’s College Grant and Scholarship Aid Reported to IRS as Income (question 43d)” until she didn’t get an error, which happened to be $5,000.

Once she eliminated the error, she signed the FAFSA and, since I knew my data was correct and wasn’t aware of the problem she had, I also signed the FAFSA.

Is there any reason to expect that I won’t be able to simply change the amount in “Student’s College Grant and Scholarship Aid Reported to IRS as Income (question 43d)” from $5,000 to $7,450?

Thanks!

Joe

2

Here’s is an interesting data point…
Before she entered $5,000 in “Student’s College Grant and Scholarship Aid Reported to IRS as Income (question 43d)”, she increased the amount she entered in “Student’s 2019 Adjusted Gross Income (question 36)” and “Student’s 2019 Income Earned from Work (question 38)” to $15,000 and then she was able to enter $7,450 in “Student’s College Grant and Scholarship Aid Reported to IRS as Income (question 43d)”. Damn math majors. Once her mathematical experiment was complete, she changed Questions 36 and 38 back to the correct amount of $10,050 and entered $5,000, instead of $7,450, in “Student’s College Grant and Scholarship Aid Reported to IRS as Income (question 43d)”

3

Should have been…

(2) After deducting all qualified education expenses, her taxable grants and scholarships were $7,450.

4

There is most likely some logic in the FAFSA that expects certain amounts. Because it’s not typical for someone to have such a high amount of taxable scholarships, the amount may trigger an “are you sure?” comment. As long as the correct amount is entered, you can safely ignore any warnings. Of course, the correct amount must be entered. By the way, the higher the amount, the lower the EFC. The formula backs out the taxable scholarships from student income.

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5

@kelsmom There is most likely some logic in the FAFSA that expects certain amounts. Because it’s not typical for someone to have such a high amount of taxable scholarships, the amount may trigger an “are you sure?” comment. As long as the correct amount is entered, you can safely ignore any warnings.

The online FAFSA application allows my daughter to enter up to $5,500 for Question 43d.

However, when she enters $7,450 (or anything over $5,500), she gets the following error message and cannot “NEXT” past the page containing Question 43d. (Unless she increases “Student’s 2019 Adjusted Gross Income - Question 36” and “Student’s 2019 Income Earned from Work - Question 38” to $15,000, then she can enter $7,450 in “Student’s College Grant and Scholarship Aid Reported to IRS as Income - Question 43d”.)

You reported a total amount from the student’s additional financial information fields that is high for the other income amounts reported.

6

What did she report for income earned from work?

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Form 1040 - Line 1 = $10,050

$ 1,254 (W-2 #1)
$ 1,346 (W-2 #2)
$ 7,450 (Taxable Scholarships and Grants/SCH 7415)

$10,050 (Form 1040 - Line 1)

Note: I cannot figure out how to get rid of the bold font.

8

But did she report income earned from work on her FAFSA as $10,050 or $2,600? The answer to question 38 should be $2,600. Edited to add: question 36 is $10,500 (assuming no other income).

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@kelsmom

Thank you, again.

I really appreciate your assistance!

Joe