FAFSA Change for Ed Tax Credit filers

<p>A new addition to the 10/11 EFC Formula Guide specifies that 1040 filers will now qualify for the simplified needs test and automatic 0 EFC if they filed a 1040 (instead of 1040A or EZ) simply to claim an education tax credit. Previously these folks had been excluded from auto 0 and SNT, although they would have otherwise met the criteria. I know there was a thread or two on this last spring...don't know if people will now have to amend their FAFSA in any way to get a new EFC though! </p>

Applicants who are not required to complete an IRS Form 1040, but do so solely to claim an educational tax credit, are considered eligible if they meet all the other requirements for the simplified EFC formulas.


<p>IFAP</a> - EFC Formula Guide</p>

<p>The rules were the same last year. The wording was as follows: "Someone who filed a Form 1040 solely to claim a tax credit is not disqualified from consideration for the simplified formula or the automatic zero EFC." Taking the education tax credit did not mean the family would not qualify for auto 0/simple needs. I suspect the reason for the change in wording this year is related to the fact that there is a new education tax credit & there was some question as to whether the new credit was included in the blanket statement.</p>

<p>That's interesting because that footnote did not appear in last year's literature...and it seems (based on posts I've read) that some folks were excluded from SNT/Auto 0. Just wondering, how was the FAFSA qualifier questions supposed to have picked up on this for the AOTC credit seekers?</p>

<p>"If your parents were not required to file a tax return or they filed a 1040 only to claim Hope or Lifetime Learning tax credits, and would have otherwise been eligible for a 1040A or 1040EZ, answer “Yes.”"</p>

<p>Those are the FAFSA on the Web instructions for 2009-10. This year's FOTW worksheet does not provide instructions for that, and I don't know what the interactive instructions are when you fill out the FAFSA ... so not sure what the student/parent filling out the FAFSA sees this year.</p>

<p>P.S. Check out the 2008 1040A. You can deduct education tax credits. If you can take a deduction on the 1040A, then you CAN file the 1040A if you take that deduction on the 1040!</p>