How do Grandparents affect FAFSA?

<p>Can anyone tell me how if your grandparents live with but has social security, how it affects the EFC? Does she count as another family member towards family size, or does she need to be dependent.</p>

<p>If your parents provide more than half her support then she counts as another family member. If they do not she does not.</p>

Completing</a> the FAFSA 07-08/The Application Questions(55-83)</p>

Other people (including your children and/or your unborn child due before July 1, 2009), if they live with and receive more than half of their support from your parents at the time of application and will continue to receive that support from July 1, 2008 through June 30, 2009.


<p>How do you prove that your parents provide over half her support?</p>

<p>They'll claim her as a deduction on their tax return.</p>


<p>My tax guy told me that for <em>tax" purposes, that it needs to be at least 50% of the support NOT counting SSI. Meaning that if they have 10,000 SSI, 1000 income (maybe interset on savings account), and your parents provide more than the 1000 *income</em> they have - say $100 per month=1200 per year, then they would qualify for <em>tax</em> purposes.</p>

<p>I have heard of people giving the person they want to be a dependant a monthly stippend, and then letitng them help pay part of the utilities etc.... I dont know if that is legal or not, know it is done.</p>

<p>Does anyone know if the definition is the same for FASFA. That if you provide over 50% of the <em>non</em> SSI support, or does it need to be thier <em>total</em> income including SSI?</p>

<p>Also, if you <em>dont</em> claim them on your taxes, but <em>do</em> provide over 50% support, can you still count them on FASFA?</p>



<p>Actually, based on tax codes (I have been a paid tax preparer for 10+ years) the support calculation would include the social security received by the grandparents...but you also calculate in ALL expenses, right down to the weekly bingo games, hairspray, denture cream, etc. You also divide up the common expenses, rent, electricity, food, etc and assess each grandparent an equal portion: If there are 5 people in the household (including grandma and grandpa) then those common expenses would be divided by 5.</p>

<p>Regulation from IRS Publication</a> 501 (2007), Exemptions, Standard Deduction, and Filing Information How to determine if support test is met. You figure whether you have provided more than half of a person's total support by comparing the amount you contributed to that person's support with the entire amount of support that person received from all sources. This includes support the person provided from his or her own funds.
EXAMPLE: Your mother received $2,400 in social security benefits and $300 in interest. She paid $2,000 for lodging and $400 for recreation. She put $300 in a savings account. </p>

<p>Even though your mother received a total of $2,700 ($2,400 + $300), she spent only $2,400 ($2,000 + $400) for her own support. If you spent more than $2,400 for her support and no other support was received, you have provided more than half of her support. </p>

<p>FAFSA regulations are a bit more tricky though...(I am also an FA Admisitrator). Just because the grandparents would qualify as dependents on the tax return, it doesn't equate an automatic addition to the household. Tax codes would allow the grandparents to be claimed by their child(ren) even if they did not reside in the same home...FAFSA will not. The grandparents MUST reside in the same home and your parents will need to document that they are providing more than 50% of their living expenses. The social security (and other sources of income received by the grandparents) will have to be listed on the FAFSA and your parent(s) will need to provide a written statement (and possibly supporting documents) to prove the support. Your parents should already have this type of supportig documentation available, in case the IRS ever questioned the support and dependency status.</p>


<p>Thanks for the headsup. The tax guy I use is a seasoned vet too, so I will print the link you posted and ask hom about it. We were considering claiming a grnadparent this year, but now I wonder how we can according to the link you give. If I find out that he is looking at it from a different angle, I'll let you all know.</p>


<p>He may be looking at a loophole in the system....but I learned LONG ago, loopholes are going good for one thing: to strangle you when you least expect it.</p>