How to Answer FAFSA Question #45: Student Untaxed Income

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45. Student's 2017 Untaxed Income (Enter the combined amounts for you and your spouse.)
  1. Payments to tax-deferred pension and retirement savings plans (paid directly or withheld from earnings), including, but not limited to, amounts reported on the W-2 forms in Boxes 12a through 12d, codes D, E, F, G, H and S. Don't include amounts reported in code DD (employer contributions toward employee health benefits).
  2. IRA deductions and payments to self-employed SEP, SIMPLE, Keogh and other qualified plans from IRS Form 1040–line 28 + line 32 or 1040A–line 17.
  3. Child support received for any of your children. Don't include foster care or adoption payments.
  4. Tax exempt interest income from IRS Form 1040–line 8b or 1040A–line 8b.
  5. Untaxed portions of IRA distributions from IRS Form 1040–lines (15a minus 15b) or 1040A–lines (11a minus 11b). Exclude rollovers. If negative, enter a zero here.
  6. Untaxed portions of pensions from IRS Form 1040–lines (16a minus 16b) or 1040A–lines (12a minues 12b). Exclude rollovers. If negative, enter a zero here.
  7. Housing, food and other living allowances paid to members of the military, clergy and others (including cash payments and cash value of benefits). Don't include the value of on-base military housing or the value of basic military allowance for housing.
  8. Veterans noneducation benefits, such as Disability, Death Pension, or Dependency & Indemnity Compensation (DIC) and/or VA Educational Work-Study allowances.
  9. Other untaxed income not reported in items 45a through 45h, such as workers' compensation, disability benefits, etc. Also include the untaxed portions of health savings accounts from IRS Form 1040–line 25. Don't include extended foster care benefits, student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Innovation and Opportunity Act educational benefits, on-base military housing or a military housing allowance, combat pay, benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion or credit for federal tax on special fuels.
  10. Money received, or paid on your behalf (e.g., bills), not reported elsewhere on this form. This includes money that your received from a parent or other person whose financial information is not reported on this form and that is not part of the legal child support agreement. See Notes page 9.

Why are they asking this information?

This question inquires about a student’s untaxed income and is broken out into six different categories.

How to answer this question / fill out this section

If a student had untaxed income in any of the following categories during the past year, they must check each of the appropriate boxes that apply to them:

  • Payments to a tax-deferred pension and retirement savings plans: Check this box if you (and your spouse) paid towards your tax deferred pension and/or retirement savings plan from your income. These figures can be found on your W-2 statement in Box 12a through 12d, items D, E, G, H, and S. Do not include item DD. Enter the sum of these items.
  • Child support received: Check the box if you (or your spouse) received child support from a non custodial parent. Then enter the amount received.
  • Housing, food, and other living allowances paid to military, clergy, and others: Check this box if you (and your spouse) had received housing payments or benefits (including cash) as a member of the military, as a clergy member, or for any other career or reason. This does not include on-base housing for military. Then enter the amount received.
  • Veterans’ non-education benefits: Check this box if you (and your spouse) received Disability (for veterans), Death Pension, or Dependency & Indemnity Compensation (DIC) and/or VA Educational Work-Study allowances. Then enter the amount received. Do not include GI Bill or Post 9/11 GI Bill.
  • Other untaxed income not reported such as workers' compensation or disability benefits: Check this box if you have any other untaxed income which had not been reported previously, such as worker’s compensation, disability benefits, etc. Then enter the amount received.
  • Money received or paid on your behalf: Check this box if you’ve received money in any fashion to help pay for expenses (education included) that has not been reported any place else on the FAFSA. You will want to report any monies given to you by a parent or relative, or third party whose financial information was not listed on this application and is not part of any type of legal support agreement. If someone who is not a parent has a 529 Plan (a deferred savings for education plan) in place for you, and you are receiving this funding to help pay your educational expenses, you will need to report this amount. Enter the amount(s) received.

Additional considerations

In all of the above scenarios, if students are married and have a spouse, they should also report their spouse’s information on the FAFSA alongside their own.

What is Untaxed Income?

Untaxed income can be identified as any income that has been earned by a student or parent which does not appear on a Federal tax return.
 
Oftentimes, students may work jobs with minimal earnings (i.e. babysitting), and are not required to file a tax return. This is seen as untaxed because these earnings are not being reported to the IRS and are not having Federal or state taxes deducted from them. Even if not reported to the IRS via a tax return, these untaxed earnings still must be reported on the FAFSA.

Examples of Untaxed Income

Other than the example above, other types of untaxed income which students and/or parents may receive in a given year are: Housing, food and other living allowances paid to members of the military, clergy and others, including cash payments and cash value of benefits, child support received, veterans’ non-educational benefits, and any money received or paid on student’s behalf (not by a parent).
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Please check back shortly as we are currently updating this step-by-step guide for the 2019-2020 FAFSA.