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Question about untaxed income on the FAFSA?

psych_psych_ Registered User Posts: 1,568 Senior Member
I'm filling out the FAFSA as an independent (for grad school). I worked at my school last year as a student employee (non-work student). For some reason, student employees here--even non-WS--don't pay taxes during the academic year, but do during the same. In this case, do I put my income from the income year in the "untaxed income" line on the FAFSA? I'm assuming "yes," but thought I'd double-check.

Post edited by psych_ on

Replies to: Question about untaxed income on the FAFSA?

  • amber2010amber2010 Registered User Posts: 166 Junior Member
    Um...my dad's income last year was non-taxable...and I screwed up a lot of things on the fafsa and ended up redoing it like 4-5 times until my mom came down and corrected it herself =/.

    I would call the FAFSA people lol. Their number is listed on the website and they keep very late hours!
  • patsmompatsmom Registered User Posts: 4,186 Senior Member
    psych, my son also has a campus job (non-WS) from which no taxes are taken out, but that pay IS taxable. In other words, when he does his tax return, he pays taxes on those wages.

    I'm sure one of the great FA experts will chime in here with the definitive answer but I think I'm right.
  • 3bm1033bm103 Registered User Posts: 4,209 Senior Member
    I'm not a financial aid expert, but I do know that if what you were paid was considered a stipend or fellowship that covered tuition, then it may not be taxable, not included on your tax return, and does not have to be added back into your FAFSA. But if it was over qualified tuition, then even if no taxes were taken out, it has to be included in your tax return. Taxes may or may not be due on it depending on the amount. And since it's already on your tax return, it does not need to be added into your FAFSA.

    Was it reported on either a 1099, W-2, or on the 1098T?
  • thumper1thumper1 Registered User Posts: 63,516 Senior Member
    DD worked on campus. Her job was TAXABLE but it did not have taxes taken out. There is a difference. I believe your income from your campus job goes under taxable income. Disclaimer...I'm just a parent with a kid who had the same job/tax issues.
  • swimcatsmomswimcatsmom Registered User Posts: 15,651 Senior Member
    Work Study income is also taxable income for federal tax purposes (and state in our state). The only exemption WS income gets is that it does not incur FICA (social security and medicare).
  • thumper1thumper1 Registered User Posts: 63,516 Senior Member
    For students working on campus....they CAN elect to not have taxes taken out of their pay with the assumption that their overall earnings will not exceed the amount that would require them to actually PAY income taxes. This is what DD did.

    However, beware if you do this...yes, you will not have deductions taken out your pay each pay period....BUT if you do happen to exceed the earnings amount, you will be required to pay the taxes owed when you file. DD did not have taxes taken out of her campus job last year...but she earned $7000 overall..and guess what...she had to send the IRS a $250 check in owed taxes when she file.
  • kelsmomkelsmom Super Moderator Posts: 14,530 Super Moderator
    The income is income from work, which is listed under that heading when filling out the FAFSA. If the student is not required to file a tax return, then that is all he needs to report. If he earned enough that he was required to file a return, there will also be amounts listed under AGI & taxes paid on the FAFSA (from the tax return) ... if a student earns enough that he is required to file but does not do so, he is not eligible to receive financial aid (we get a handful of students like this every year).
  • psych_psych_ Registered User Posts: 1,568 Senior Member
    Thanks for all the responses. Yes, the income is reported (and, I'm assuming, thus taxed?) on an annual tax return, just not in my paycheck deductions.
This discussion has been closed.