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FAFSA and Social Security Disability

Somestudent2Somestudent2 Posts: 213Registered User Junior Member
Hello,

My older sibling is currently attending college--entering his sophomore year--and my family filed a new FAFSA several months ago to renew his aid. However, when reviewing the FAFSA, I noticed that my mother included my father's Social Security Disability benefits--about $15,000 per year--as ordinary income.

I saw that, under item 92i, the FAFSA asks to report any "other untaxed income not reported in items 92a" and to "not include . . . untaxed Social Security Benefits."

So, I have several questions:

1. How do we know how much of my father's social security benefits are taxable? With my father's benefits, our AGI is in the high 40s, and my parents are filing jointly.

2. Each month, we receive a separate check that is made out to my father "for [me]"; that is, he checks it, but it's technically "for me." Is that his income, or is that considered my income? (then again, if it's all nontaxable, then the point is moot).

3. When we do correct this, is it necessary to inform the college specifically that it has been corrected? Or will FAFSA alert the college?

Thank you very much!
Post edited by Somestudent2 on

Replies to: FAFSA and Social Security Disability

  • Somestudent2Somestudent2 Posts: 213Registered User Junior Member
    a tiny correction: my father doesn't "check" the check written out "for [me]"; he deposits it. It was late!
  • OlymomOlymom Posts: 1,686Registered User Senior Member
    Go to page one of the 1040 tax form and go to line 20a. Every year your folks have to figure out how much of the SS benefits are taxable. They do that by going to the corresponding guidebook (or computer program sheet) and doing the SS benefits worksheet. So, maybe 85% of his benefit ends up being taxable and the other 15% is not taxes (or the opposite) then they take the taxable number and fill in the WHOLE SS benefit (line 20a) and then they scoot over and fill in the taxable amount (line 20b)

    The difference between WHOLE SS benefit (20 a) minus the Taxable (line 20b) gives you the untaxed SS benefit.

    Or you can just include the taxable benefit (line 20b) if that is needed in one of the slots

    Whew. It's a hassle, I know. Make sure you print off a copy of what you do and make some notes in the margin so next year it will go much faster.

    Good luck!
  • Somestudent2Somestudent2 Posts: 213Registered User Junior Member
    Thank you!

    Now, where does the taxable social security income go on the FAFSA? Is it considered a "wage"? Because otherwise, none of the slots fit it.
  • OlymomOlymom Posts: 1,686Registered User Senior Member
    Look on the front page of the 1040 form. You will see that lines 7 through 21 total up to line 22 (total income). The taxable part of the SS went into that (line 20b).

    So then stuff comes off of the total income (line 22) by subtracting out all the stuff that pertains to your family (lines 23 through 35) and you get down to line 37 which is the important one. It is called ADJUSTED GROSS INCOME.

    You are going to take that line 37 (Adjusted gross income) and put it into the FAFSA question under the parents section that asks for Parent's Adjusted Gross Income. That number INCLUDES the taxable social security (think of it like chocolate chip cookie dough. The SS number is the chocolate chip that got blended into the batter).

    Make yourself a nice note on this so next year you can go whizzing through this and not have to re-engineer the process. Print off a copy of your final Fafsa so you'll have a record to go from next year.

    The first year of this is definitely the hardest. If you keep copies and good notes, then next year should be much easier.

    Good luck!
  • anon012anon012 Posts: 1Registered User New Member
    I would like to clarify that I called FAFSA help, and was told that SSDI payments are not to be entered into the FAFSA form anywhere including on 92i. There is a previous poster on another thread who has done this twice with final approval.

    Please read the first paragraph on post #16 by sk8rmom in thread titled, " Effect of Social Security-Disability on FAFSA."

    http://talk.collegeconfidential.com/financial-aid-scholarships/864695-effect-social-security-disability-fafsa-2.html
  • sk8rmomsk8rmom Posts: 5,746Registered User Senior Member
    anon, only untaxed SSDI isn't reported...the OP's dad may have some taxable SSDI as olymom explained.
  • kelsmomkelsmom Posts: 12,289Super Moderator Senior Member
    If the FAFSA help line said that NO SSDI payments are entered, they gave you incorrect information. The federal aid handbook clearly states that UNTAXED social security payments are not reported on the FAFSA. While it does not state that the taxable portion of SS is reported, the instructions state that AGI is reported ... the number must be the number on the tax return. In order to not report taxable SS, you would have to change the AGI value. I can tell you without hesitation that this is not allowed (I was a financial aid officer until recently, and I was known as the Compliance Queen for my knowledge of federal regs).
  • familyof3boysfamilyof3boys Posts: 1,208Registered User Senior Member
    From http://studentaid.ed.gov/students/attachments/siteresources/2012-13CTF.pdf
    (scroll down to pages 37-38 and 56-57)

    35. (STUDENT's) Adjusted Gross Income. Provide your (and your spouse‘s) adjusted gross income (AGI) for 2011. AGI is found on IRS Form 1040—line 37; 1040A—line 21; or 1040EZ—line 4. If you have not completed a 2011 tax form, you should calculate your AGI using the instructions for the applicable IRS form. You can get the instructions and the form at a public library or download them in Portable Document Format (PDF) from Forms and Publications.

    Note: AGI includes more than just wages earned; for example, it also includes interest, dividends, alimony, taxable portions of Social Security, and business income.


    83. (PARENT's) Adjusted Gross Income. Enter your parents‘ adjusted gross income (AGI) for 2011. AGI is found on IRS 1040—line 37; 1040A—line 21; or 1040EZ—line 4. If your parents have not completed a 2011 tax form, they should calculate their AGI using the instructions for the applicable IRS form. They can get the instructions and the form at a public library or download them in Portable Document Format (PDF) from www.irs.gov/formspubs/index.html.

    Note that AGI includes more than just wages earned; for example, it also includes interest, dividends, alimony, taxable portions of Social Security, and business income.
  • jaw1942jaw1942 Posts: 1Registered User New Member
    my husband and I do not file taxs because all we have is his SS and my SSD so would I put anything or not?
  • lexingtonlexington Posts: 41Registered User Junior Member
    we filled out a 1040 tax return this year even though we were not required to file taxes so we could include it with the FAFSA. Our only income is the social seciruity disability benefits and we think it is all non taxable and when I talked to a fin aid counselor at the university they said our income comes up as zero from fafsa my concern is that we did not include a payment for our youngest child on the income tax since that goes to her ss# not mine or husbands, but there is always a spot include that for the kids under total household income on other need based state programs I have applied for High school senior D included her 4000. ss payment along with her earned income from a part time job. Any suggestions as to what we should be doing so far as the taxes and the FAFSA I was alerted to this when we were filling out a FAFSA income verification worksheet for another program, the only spot for it here seems to be child support(seems that would be a spot for support between parents for a child they share custody of) would I put it there or are they going to consider it parents other untaxed income or benefits?
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