How to answer parent income tax questions on the FAFSA^®

Why do they need this info?

• For your student to be eligible for federal aid, you have to consent to allow the FAFSA^® to import your tax return information directly from the Internal Revenue Service (IRS) for your application. Providing consent also lets you skip the remaining income tax questions on the FAFSA^®, making it faster to complete.

Can I skip these questions?

• Not if you want your student to get federal FAFSA^® money! You must answer AND provide consent, or your student will be ineligible for federal financial aid.
• Even if you type in your tax return information yourself (which you can do if you decline to provide consent), your student still won’t qualify for federal aid.

How to answer these questions

• For the online application, select “Approve” to consent to transfer federal tax information from the IRS.
• For the paper version, on question 41 check the circle next to “Approval to transfer federal tax information from the Internal Revenue Service (IRS)”.
• Provide your signature and the date.

Why do they need this info?

• The FAFSA^® looks at parent tax returns and other financial info when figuring out the student’s financial aid eligibility.

Can I skip these questions?

• Yes, as long as you provide consent to transfer federal tax information from the IRS.
• Your FAFSA^® won’t be processed and your student won’t qualify for federal financial aid unless you provide this consent.
• On the paper form, you can skip all of question 38 as long as you provide electronic transfer consent in question 41.
• The FAFSA^® will import your tax return info into your application once you’ve provided consent.

How to answer these questions

• Select yes if you filed a 2023 IRS Form 1040 or 1040-NR or plan to. Also select yes if you filed or will file a tax return with Puerto Rico or another U.S. territory.
• Select yes if you earned income in a foreign country or were employed by an international organization like the United Nations, World Bank, or International Monetary Fund.
• Select no if these situations don’t apply to you.

Why do they need this info?

• If your student is dependent, the FAFSA^® needs your tax return info to figure out your student’s financial need. Your student is considered dependent if all of the following statements are true:
  • The student was born after the year 2001.
  • The student’s current marital status is Single (never married), Divorced, Separated or Widowed. (question 3 on the FAFSA^® paper version)
  • The student’s college grade level will be first-year, second-year, or other undergraduate. (question 4 on the FAFSA^® paper version)
  • They answered “None of these apply” to the Student Personal Circumstances question. (question 5 on the FAFSA^® paper version).
  • They answered no to the Student Other Circumstances and Student Unusual Circumstances questions (questions 6 and 7 on the FAFSA^® paper version).
• Married couples filing separately will need to provide tax info for the student’s other parent in the next section.

Can I skip these questions?

• Yes, as long as you provide consent to import federal tax information from the IRS in the previous section.
• Your FAFSA^® won’t be processed and your student won’t qualify for federal financial aid unless you provide this consent.
• On the paper form, you can skip all of question 38 as long as you provide electronic transfer consent in question 41.
• The FAFSA^® will import your tax return info into your application if you’ve provided consent.

How to answer these questions

• Check “Consent to transfer federal tax information from the Internal Revenue Service” (question 41, Parent Consent and Signature on the paper version).
• For the section Amount of College Grants, Scholarships, or Americorps Benefits Reported to the IRS (optional), enter 0—unless the amount of scholarships and grants is greater than the cost of tuition and fees. In this case, only enter the amount greater than tuition and fees.

Why do they need this info?

• FAFSA^® factors in the amount of child support you received when calculating your student’s eligibility for aid.
• Child support isn’t reported with your tax returns, so you need to enter it here.

Can I skip this question?

No, but you can answer zero (0) if you didn’t receive child support.

How to answer this question

• Enter any child support you received in the calendar year 2023.
• Enter zero (0) if you didn’t receive any.

Why do they need this info?

The FAFSA^® requires details about your (and your spouse’s, if you’re married) financial assets to help calculate your student’s financial need.

Can I skip this question?

How to answer these questions

• Enter the current total of any cash you have, and the combined total of all your (and your spouse’s) checking and savings accounts.
• Enter the total value of your (and your spouse’s) investments, subtracting any debts.
• Enter the current value of your (and your spouse’s) businesses and/or farms (whatever their size) and subtract any debts owed on them.
• Don’t include any retirement investments, including 401k or 403b, accounts, pensions, IRAs, etc.
• If the value of any of your assets is negative, enter a “0”.

What else should I know?

Net worth means the current value, as of today, of investments, businesses, and/or investment farms, minus debts related to those same investments, businesses, and/or investment farms. When calculating net worth, use 0 for investments or properties with a negative value.

Investments include real estate (do not include the home in which you live), rental property (which may include a unit within a family home that has its own entrance, kitchen, and bath rented to someone other than a family member), trust funds, UGMA and UTMA accounts, money market funds, mutual funds, certificates of deposit, stocks, stock options, bonds, other securities, installment and land sale contracts (including mortgages held), commodities, etc.

Investments also include qualified educational benefits or education savings accounts (e.g., Coverdell savings accounts, 529 college savings plans, and the refund value of 529 prepaid tuition plans). For a student who does not report parental information, the accounts owned by the student (and/or the student’s spouse) are reported as student investments in question 22. For a student who must report parental information, the accounts are reported as parental investments in question 40, including all accounts owned by the student and all accounts owned by the parents for any member of the household.

Investments do not include the home you live in, the value of life insurance, ABLE accounts, retirement plans (401[k] plans, pension funds, annuities, non-education IRAs, Keogh plans, etc.) or cash, savings and checking accounts reported in the previous question.

Investments also do not include UGMA and UTMA accounts for which you are the custodian, but not the owner.

Investment value means the current balance or market value of these investments as of today. Investment debt means only those debts that are related to the investments. Business and/or investment farm value includes the market value of land, buildings, machinery, equipment, inventory, etc.

Business and/or investment farm debt means only those debts for which the business or investment farm was used as collateral.