Allthemuffins

I'm going to be applying for the Washington State College Bound scholarship, and I had a few questions about what is regarded as income. My sister is attending a private college with a lot of grants and loans, and my mother is attending a public university part time to finish up her masters. Neither of my parents are 59 1/2 (57 and 55) but they are using their IRA.

Will the FAFSA count IRA withdrawals as part of my parents' income?

thumper1

Any withdrawals from an IRA are income for financial aid purposes regardless of the age of your parents.

mazewanderer

Is it a regular or ROTH IRA. While thumper1 may be right, you may want to check what portion of the distribution is considered as income. For example, a ROTH IRA is penalty free if you used for educational purposes and you pay the tax only on the gains, not on the principal. Again, not a tax expert, but it appears that the interest will definitely count as income as you pay tax on it. I am not sure if the return of the principal will count.