The Department of Education has released the draft of the 2020-2021 FAFSA with supporting statements for the changes and is open for comments until June 1st.
https://www.regulations.gov/document?D=ED-2019-ICCD-0039-0005
Is there a specific place to look for the change eliminating the 1040A and EZ as criteria for simplified needs and auto $0?
The changes are to line 35 of the FAFSA, but the Paper Summary explains it the simplest.
This is the link to the revised FAFSA
Supporting Statement talks about the Simplified Needs Test and Auto Zero.
This looks like the change. Instead of 1040A or 1040EZ…the independent student or parents did NOT file@ 1040 Schedule 1.
The other two qualifiers are the same…
- Qualifying for a means tested benefit.
- Dislocated worker.
Which is going to make quite a few people ineligible that were eligible before. Like everyone in Alaska that reports the Permanent Dividend fund, or anyone that puts money in a deductible IRA. These were both on the 1040A before, but have been pushed to Schedule 1.
Perhaps if their income is low enough…those folks will apply for SNAP or free/reduced lunch. They don’t have to USE the benefit…they just need to be eligible.
What is a deductible IRA (from above explanation.) , is it the same as annual IRA contribution amount?
A tax-deferred IRA that is subtracted from your AGI (not a ROTH that is post-tax).
They fixed the FAFSA form since this post though. Contributing to an IRA doesn’t effect qualification for the Simplified Needs Test now.
We cannot find the dislocated worker or free/reduced lunch questions to fill out on the 20/21 form. Were they removed?
Does you income fall below the threshold to qualify for simplified needs or auto $0? If not, those questions will not appear.
Federal benefits received (including free or reduced price school lunch) are asked about in questions 74. through 78. The dislocated worker status is covered with question 83. If you are completing FAFSA online, these questions may be omitted based on skip logic.
I don’t remember if the web version is numbered but those are questions 76 and 83 on the paper form.
Yes, I see them on the paper form but cannot find them on the web form.
If these questions are being eliminated due to skip logic, the logic is broken. My husband has been a dislocated worker for the nearly two years, and for about 3 months in 2018 we were both unemployed and qualified for both Medicaid and Free/Reduced lunch for our 3 kids.
You only need one qualifier for Simplified Needs or Auto Zero outside of the AGI so maybe they just don’t matter if you’ve already qualified based on previous answers?
But is your income under $50k?
No, income is over $50K. So is $50K income the skip qualifier? It would be nice if there was a reference available to the skip logic.
The skip logic is working just fine.
If your income is over 50K the question doesn’t matter at all.
If your income is over $50,000, you would not qualify for simplified needs or auto $0 EFC. That’s the first qualifier…income.
The questions about dislocated worker, free lunch, etc are the second qualifier and would not appear on your form online…the skip logic would eliminate them…because you didn’t meet the income criteria.