I am trying to understand 44a/c/d so what to report on FAFSA. and how it effect the EFC.
44a. Student’s Education Credits.
44c. Student’s Taxable Earnings from Need-Based Employment Programs.
44d. Student’s College Grant and Scholarship Aid Reported in AGI.
Student will be Junior this Fall, He is getting Scholarships and Grants from the School. ~$38k
Also works on Federal work Study. $3.5k
1098-T shows $38k in box 5.
Ok I think 44a would be education credits that student claims on tax return if not a dependent on parent’s tax return. Normally parents claim them on their return if the student is their dependent for tax purposes.
44c I believe you put earnings from federal work study there. Did he get a W2?
44d would only be the taxable amount of scholarships or grants that he got in year 2015 and reported as part of AGI on his 2015 tax return (or better will be reporting since he hasn’t done taxes yet).
to figure taxable part, subtract from all scholarships that he received in 2015 the amount for tuition, fees and books for 2015. See Publication 970 for details.
Items are reported on those lines to avoid penalizing the student for receiving an education credit, work study income, taxable grants/scholarships included in AGI.
Student is claim as parent dependent so 44a=0.
Student didnt get the W2 yet but its not more then 3.5k for year 2015. Since the amount is less then 6.5k its not taxable. so may be 44c=0.
44d- I guess his scholarships and grants are not taxable since all were used for paying Tuition, Books and other Fees.
I dont recall he filed a Tax return for 2014 since his income was <1.5k in year 2014.
It may not be “taxable” in the sense that he won’t owe tax on it if his income doesn’t meet the threshold, but it is “taxable” in the sense that it’s included in AGI and thus will be reported on FAFSA. I think that any work-study earnings should be reported in 44c.
I verify now that he did file 1040EZ in 2014 and he did not owe or get any refund from IRS.
I agree with @BelknapPoint. List the federal work study income in 44c, it should be subtracted from income for FAFSA because it was from need based employment.
This is not relevant to the FAFSA. The question is included because work study earnings are considered need based financial aid for financial aid purposes. The amount is will NOT be included in the FAFSA formula…so you really need to list it. That amount is included in yoir kid’s AGI, but will be subtracted in the FAFSA formula calculation.
So listing the AGI amount can lower the EFC or it has no affect on the EFC
Same for 44d do I need to list the scholarships and grants and will it affect EFC ?
Listing the work study income in 44 c should reduce student available income for FAFSA.
Listing taxable scholarships in 44 d will subtract them from student income for FAFSA.
You do however have to list them on tax return and include in AGI to begin with.
But you said your son didn’t have taxable scholarships
Correct the scholarships he getting are all used for Tuition and books so that means it’s non taxable. So 44d should be 0.
Last year I did get AOC of ~1560 in parents tax return.
The FAFSA will ask first for AGI. If student has W2 income it will be listed and also if he has federal work study income or taxable scholarships. Then later in questions 44 c and d you can list work study income or taxable scholarship amounts if they were included in AGI. If they were not included in AGI then there is nothing to reduce.
Also the 2016-17 FAFSA is based on the year 2015 income. The tax return for 2015 has not been filed yet. So these are based on estimates for now. You getting an AOTC last year does not matter for this year or for the part of FAFSA (questions 44) that ask about student.