Screen FAFSA - Federal Student Aid Application Information (1040)
Overview
Use this screen to enter information to calculate a worksheet that your client can use to complete the Free Application for Federal Student Aid. The FAFSA worksheet will calculate from the tax return or will print with information entered from a completed tax return.
note
One worksheet should be completed in the parent's return and one in the student's return. If the parent's or student's return was completed elsewhere, a second unit of the
FAFSA
screen can be added to enter the information from the tax return. If no other tax return will be filed, add a second unit and enter the information.
This screen won't share information between returns.
The FAFSA form lets a specific number of digits for the financial information, generally 5 or 6 digits depending on the field. If the data entry exceeds these limits, the number prints on the worksheet in the format requested by FAFSA, generally 99,999 or 999,999.
The FAFSA (Free Application for Federal Student Aid) form instructions state to use Form 1040 lines 7 + 12 + 18 + Box 14 (Code A) of Schedules K-1 to calculate how much is earned from working. This information seems incorrect when examining how the income earned from work is used in the calculation of the EFC (Expected Family Contribution) Worksheet. The income earned from work is used in Table A2 of the EFC Formula to determine the Social Security tax allowance which is more accurate when using W-2 box 5 + line A.4 or B.6 of Schedule SE to calculate how much is earned from working.
UltraTax CS provides the option to calculate the income earned from work using either method. The default treatment uses the FAFSA form instructions (Form 1040 lines 7 + 12 + 18 + Box 14 (Code A) of Schedules K-1). Select
Setup
,
1040 Individual
,
Other Return Options
,
Other
tab, and mark the box for
Calculate FAFSA earnings from work per the Expected Family Contribution Worksheet
to use that method (W-2 box 5 + line A.4 or B.6 of Schedule SE.)
General Information
Use this section to indicate how the FAFSA Worksheet will calculate.
Primary taxpayer identification
Enter
1
if the primary taxpayer on the return is the student's father or stepfather. Enter
2
if the primary taxpayer is the student's mother or stepmother. Enter
3
if the primary taxpayer is the student. Enter
4
if the primary taxpayer is the student's spouse.
Filing FAFSA for school year
Beginning 2016, the FAFSA filing will be October 1 and will use the prior year's tax return information. FAFSA can be filed beginning October 1, and will use the tax return information from two years ago. UltraTax CS will produce a FAFSA Worksheet for the next two school years. Enter
1
to complete the next year's FAFSA. Enter
2
to complete the following year's FAFSA. Up to two FAFSA worksheets calculate, a parent worksheet, and a student worksheet.
The next school year's FAFSA can be filed beginning October 1, using the tax return information from two years ago. For example, if completing a FAFSA for the 2021 - 2022 school year, then tax return information from 2019 will be used.
Worksheet is calculated from return information or entered from another return
This field is relevant only when
2
is entered in
Filing FAFSA for school year
. Select the type of calculation for this worksheet (Calculated or Entered from another tax return). If
Calculated
is selected, UltraTax CS will use the tax return information to fill out the worksheet. If
Entered from another tax return
is selected, the amounts entered in the input screen are used to fill out the worksheet.
Status of this return?
Enter
1
if the tax return is complete. Enter
2
if the return will be filed but isn't yet complete. Enter
3
if the return won't be filed.
Other Information
Use this section to enter information for the FAFSA Worksheet that's not found on the tax return.
Taxpayer and spouse's total current balance of cash, savings and checking accounts
Enter the current balance at the time the worksheet is completed. Don't include student financial aid.
Taxpayer and spouse's net worth in investments...
Enter the current net worth at the time the worksheet is completed. Net worth means current value minus debt. Don't include the primary residence and don't enter an amount less than zero. Investments include trust funds, UGMA and UTMA accounts (for the owner, not the custodian), money market funds, mutual funds, stock options, bonds, other securities, installment and land sale contracts, commodities, etc. Investments also include qualified educational benefits or education savings accounts. Investments don't include the primary residence, value of life insurance, retirement plans, and accounts already reported under the balance of cash, savings and checking accounts.
Taxpayer and spouse's net worth in current businesses and/or investment farms
Enter the current net worth at the time the worksheet is completed. Net worth means current value minus debt. Don't enter an amount less than zero. Business value includes the market value of land, buildings, machinery, equipment, inventory, etc. Business value doesn't include the value of a small business if the student's family owns and controls more than 50 percent of the business and the business has 100 or fewer full-time or full-time equivalent employees or the value of a family farm that the student and/or the student's parents live on and operate.
Child support paid because of divorce...
Enter the amount of any support paid because of divorce, separation, or as a result of a legal requirement. Don't include support for children in the household.
Taxable earnings from need-based employment programs...
Enter the amount of any taxable earnings from need-based employment programs such as Federal Work-Study, and the need-based employment portions of fellowships and assistantships. This income should also be included in the fields Taxpayer or Spouse earnings from work.
Student grant and scholarship aid included in adjusted gross income
Enter the amount of any student grant and scholarship aid included in adjusted gross income, including AmeriCorps benefits (awards, living allowances and interest accrual payments), as well as grant and scholarship portions of fellowships and assistantships.
note
This field can be left blank if the FAFSA worksheet is being calculated from the tax return and the only student grant and scholarship aid included in adjusted gross income is entered in the
Income
screen, in the
Other income
statement, with a Federal Code of
5
.
Veterans noneducation benefits...
Enter the amount of any veterans noneducation benefits, including Disability, Death pension, Dependency and Indemnity Compensation (DIC) and/or VA Educational Work-Study allowances. Don't include veterans educational benefits such as the Montgomery GI Bill, Dependents Education Assistance Program, VA Vocational Rehabilitation Program, VEAP Benefits or Post-911 GI Bill.
Other untaxed income not reported elsewhere...
Enter the amount of any untaxed income not reported already, including worker's compensation, disability, etc. Don't include student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Investment Act educational benefits, on-base military housing or a military housing allowance, combat pay, benefits from flexible spending arrangements, foreign income exclusion or credit for federal tax on special fuels.
note
This field can be left blank if the FAFSA worksheet is being calculated from the tax return and the only untaxed income not reported already is the health savings account deduction on Form 1040, line 25.
Money received, or paid on your behalf, not reported elsewhere...
Enter the amount of any money received or paid (for example, bills), that's not reported already. Don't include cash support from a dependent student's parents. This question is only relevant for the student section of the FAFSA. Select
3
or
4
in
Primary taxpayer identification
to access this field.
Tax Return Information
Use this section to enter an amount that's different from the amount calculated in the return, or to enter amounts from a tax return that was completed elsewhere. Married filing separate returns will have to sum the information and enter the totals on one
FAFSA
screen.
Taxpayer and spouse names and taxpayer identification numbers
Use the attached statement to enter the taxpayer and spouse names and social security numbers if different from the amount calculated in the return, or to enter information from a tax return that was completed elsewhere.
Tax return filed or will be filed (Force)
Enter the type of tax return that was or will be filed. The options are available in the fieldview and are listed in the following table:
1
1040
2
1040A or 1040EZ
3
Foreign return
4
Puerto Rico or other territory
Tax return filing status
Enter the filing status used on the tax return that was filed or will be filed. If the FAFSA Worksheet is being calculated from information entered in another return, and this field is left blank, the worksheet will display "
Don't know
" as the response for the line
For
2024
, what is or will be you/your parents' tax filing status?
The options are available in the fieldview and are listed in the following table.
1
Single
2
Married filing joint
3
Married filing separate
4
Head of household
5
Qualifying widow(er)
If Form 1040, was the return eligible for Form 1040A or 1040EZ?
Select
Yes
if Form 1040A or 1040EZ could have been filed,
No
if not, or leave it blank if unsure if the return qualified for 1040A or 1040EZ. If Form 1040 was filed only to claim the Hope or Lifetime Learning credit and was otherwise eligible for a 1040A or 1040EZ, answer
Yes
.
Adjusted gross income...
Enter the adjusted gross income from Form 1040 line 37, 1040A line 21 or 1040EZ line 4.
Income tax for...
Enter the income tax from Form 1040 line 56, 1040A line 37 or 1040EZ line 10.
Total exemptions...
Enter the exemptions from Form 1040 line 6d or 1040A line 6d. For 1040EZ, if no boxes are checked on line 5, enter
1
if the taxpayer is single,
2
if the taxpayer is married. If either box on line 5 is checked, use 1040EZ worksheet line F to determine the number of exemptions.
Taxpayer earnings from working (Force)
Answer this question whether or not a tax return was filed. This information may be on Form W-2, Form 1040 lines 7 + 12 + 18 + Box 14 of Schedule K-1 (Form 1065), or 1040A line 7, or 1040EZ line 1. If any individual earning item is negative, don't include that item in the calculation.
note
The Expected Family Contribution worksheet uses this amount when calculating the Social Security allowance. Select
Setup
,
1040 Individual
,
Other Return Options
,
Other
tab, and mark the box for
Calculate FAFSA earnings from work per the Expected Family Contribution Worksheet
to use that method of calculating earnings from working (W-2 box 5 + line A.4 or B.6 of Schedule SE).
Spouse earnings from working (Force)
Answer this question whether or not a tax return was filed. This information may be on Form W-2, Form 1040 lines 7 + 12 + 18 + Box 14 of Schedule K-1 (Form 1065), or 1040A line 7, or 1040EZ line 1. If any individual earning item is negative, don't include that item in the calculation.
note
The Expected Family Contribution worksheet uses this amount when calculating the Social Security allowance. Select
Setup
,
1040 Individual
,
Other Return Options
,
Other
tab, and mark the box for
Calculate FAFSA earnings from work per the Expected Family Contribution Worksheet
to use that method of calculating earnings from working (W-2 box 5 + line A.4 or B.6 of Schedule SE).
Education credits...
Enter the amount of any education credits (American Opportunity, Hope and Lifetime Learning tax credits) from Form 1040 line 50 or 1040A line 33.
Combat pay that is taxable...
Enter the amount of combat pay or special combat pay that was taxable and included in adjusted gross income. Don't enter untaxed combat pay reported on the W-2 (Box 12, code Q).
Payments to tax-deferred pension and savings plans...
Enter the amount of any payments to tax-deferred pension and savings plans, whether paid directly or withheld from earnings, including amounts reported on the W-2 (Box 12, codes D, E, F, G, H and S).
IRA deductions and payments to SEP, SIMPLE, Keogh...
Enter the amount of any IRA deductions and payments to self-employed qualified plans from Form 1040 lines 28 + 32, or 1040A line 17.
Tax exempt interest (Force)
Enter the amount of tax exempt interest income from Form 1040 or 1040A line 8b.
Untaxed portions of IRA distributions (Force)
Enter the amount of any untaxed portions of IRA distributions. This can be calculated from Form 1040 line 15a minus line 15b or 1040A line 11a minus line 11b. Exclude rollovers.
Untaxed portions of pensions (Force)
Enter the amount of any untaxed portions of pension distributions. This can be calculated from Form 1040 line 16a minus line 16b or 1040A line 12a minus line 12b. Exclude rollovers.
Untaxed portions of health savings accounts (Force)
Enter the amount of any untaxed portions of health savings accounts, which can be found on Form 1040, line 25. This amount will be added to any amounts reported in
Other untaxed income not reported elsewhere
and will display on the FAFSA Worksheet, Other untaxed income.
Housing, food, and other living allowances...
Enter the amount of allowances paid to members of the military, clergy and others (including cash payments and cash value of benefits). Don't include rent subsidies for low-income housing, the value of on-base military housing or the value of a basic military allowance for housing. The Tax-Free Ministerial Income from the Clergy Worksheet Page 1 - Percentage of Tax-Free Income, line 5b is automatically included.
note
When no tax return is being filed, the Expected Family Contribution worksheets use the income earned from work figures in place of Adjusted gross income. A clergy housing allowance is included in the income earned from work but isn't included in adjusted gross income. When
Status of this return?
is 3 (Will not be filed), the housing allowance calculates as 0 (zero) to avoid counting the allowance twice when calculating total income on the Expected Family Contribution worksheets.