<p>Your parents may have to eventually send in a copies of their tax returns and W2s to back up their FAFSA data. A few of my son’s schools required copies of the tax returns and W2s right up front, as part of the financial aid application process, as opposed to waiting to see if prospective students are selected for verification. In other words, the schools already have my tax returns and W2s at their disposal.</p>
<p>If you’ve applied to any schools that require your parents’ tax returns and W2s right up front, then your schools WILL see them in addition to your FAFSA. I mention this because if your parents had pre-tax money withheld from their paychecks for deposit into 401k plans, then it will be evident on their W2s, and the schools will see the inconsistencies on their FAFSA data. It doesn’t matter to them whether the money your parents had withheld was lost in the recession or not. What they wanted to know, as I recall, is whether you had any money withheld for that purpose and how much.</p>
<p>I wouldn’t be dishonest or misleading. Even if your schools don’t require the returns and W2s right up front, you may be selected for verification, at which point you’d have to submit them.</p>