Do I Include This on the FAFSA^®?

The Free Application for Federal Student Aid (FAFSA) is the primary application used to determine financial aid eligibility, and it's required by every college and university in the country. Families often have questions about what's reported on the FAFSA, particularly when it comes to income and assets. We listed out the most common items asked about below and provided details on whether or not you need to report it. Keep in mind this is only guidance for the FAFSA, as the CSS Profile has different questions and may ask you to report on something the FAFSA excludes.

A Multi-Family Unit

If you own a multi-family unit, and live in one of those units, the net value (market value of the property minus any debt) of the units you don't live in should be reported as assets. You won't report the value of the unit in which you live.

Unemployment

Your unemployment compensation will be included in your Adjusted Gross Income on your federal income tax return, so you'll end up reporting it just as you would report your salary on the FAFSA in the taxable income section. Individuals with unemployment compensation often have differing levels of income from year to year, due to working one year and not working the next. It's advisable to contact the financial aid office at each college if your income level changes significantly, as it may affect your eligibility for financial aid.

Cars

Cars are not reported on the FAFSA

Boats

Boats are not reported on the FAFSA

Credit Card Debt

Credit card debt is not reported on the FAFSA

Life Insurance

Life insurance is not reported on the FAFSA

Roth IRA Contributions

Contributions to a Roth IRA are not reported on the FAFSA. The Roth IRA is not a tax-deferred program, and only tax deferred contributions to retirement funds should be included on the FAFSA as untaxed income.

Roth IRA Withdrawals

Distributions from a Roth IRA are reported as income on the FAFSA. The distributions are reported as taxable income or untaxed income, depending on whether they are included in Adjusted Gross Income or not.

Pension Distribution

A pension distribution is reported as income on the FAFSA.

Workers Compensation

Workers' compensation is reported as income on the FAFSA.

Inheritance

An inheritance is reported on the FAFSA as untaxed income for the appropriate year. Depending upon where you put the inheritance, you may also list it as an asset. Make sure to reach out to the college financial aid office and let them know that the inheritance is a one-time occurrence and not representative of your normal income. The college may make subsequent adjustments to your eligibility.

Insurance Settlement

The full amount of an insurance settlement distribution is reported, whether it was a lump sum or annual distribution, and it will count as taxable or untaxed income, as appropriate.

Involuntary Pretax Contributions to a Pension

Involuntary pretax contributions to a pension plan are not reported on the FAFSA. You must list all voluntary pretax income as untaxed income.

Student Funds Earned Through a Co-Op

Student funds earned through a co-op are reported on the FAFSA as income. But they are excluded by the financial aid office when your eligibility for financial aid is calculated.

Artwork

Artwork is not reported on the FAFSA

Jewelry

Jewelry is not reported on the FAFSA

Bank Account on Which You Are a Custodian

If your child has a custodial account set up by you, the custodial account is reported as an asset of your child, not you.

For a full overview of how to complete the FAFSA, watch our Understanding the FAFSA webinar. And feel free to email us at collegeplanning@mefa.org with any questions you have as you navigate completing the application.

Watch the Understanding the FAFSA webinar