<p>Two adjustments to income from the first page of the 1040 are expected to be reported as untaxed income: Payments to self-employed SEP, SIMPLE, and qualified plans (line 28) and IRA deductions (line 32). These reduce taxable income and are reported on the FAFSA as “IRA and KEOGH Deductions” in the untaxed income section.</p>
<p>Other tax-return/W2 related items that must be reported (as many of you here already know) are the untaxed payments to pensions (W2 box 12, D, E, F, G, H, and S), tax exempt interest (line 8b), untaxed portions of IRA distibutions (line 15a-line 15b), untaxed portion of pensions and annuities (line 16a-line16b) … although qualified rollovers are not reported, and the fist $2400 of unemployment payments that does not get reported on the 1040 (but must be reported on the FAFSA as Other Untaxed Income).</p>
<p>Most tax credits are not reported because the regs state that they do not need to be reported. First time home buyer credit is reported because the regs do not address it as being not having to be reported.</p>