2009 FAFSA Help Guide: Definition of a Parent

Step #4 of the FAFSA Online Guide to the FAFA Form tutorial follows. If you have not read through steps 1-3, we suggest you start with step #1. If you are ready to file your FAFSA form or Renewal FAFSA form online, then please click here.

Step #4: Who is a Parent?

Before you begin, who is a parent?

• Obviously, if you live at home with your married parents, they are your parents.
• If a parent is widowed or single, fill in the questions appropriately.

Start Your FAFSA - Financial Aid Application Form

• A step-parent (after marriage) is considered a parent from a financial aid perspective.
• If the parents are divorced or separated, the parent is considered to be the one which the student lived with more in the past 12 months.
• If the student did not live with either parent in a divorced/separated situation, the parent is the one who contributed more financial assistance in the past 12 months.
• If the student did not receive appreciably more support from one parent or another, the parent is the one who claims the student as a dependent on the IRS tax return.
• A foster parent, legal guardian, or a grandparent or other relative is not treated as a parent for purposes of filing a FAFSA unless that person has legally adopted the applicant. An adoptive parent is treated in the same manner as a biological parent on the FAFSA.
• If you answered Yes to any question in Step 3, skip Step 4.

This step will also be easier if you have the parent's IRS 1040 form available (in PDF format). Print it out, fill it out to the best of your ability, and have it handy.

Step #4: Parental Information (Purple section)

• This section is about the parent, not the student.
• Question 61: This is your parents' marital status as of the day you file the FAFSA.
• Question 62: A confusing one - this is the most recent date of your parents' status. For example, if your parents are still married, this is the date of their marriage. If your parents were married and divorced, this is the date of the divorce, not the marriage.
• Questions 63-65 and 67-69: Basic information about the parents.
• Questions 66 and 70: The age of your oldest parent is important because in the FAFSA financial aid formula, there's a table called the Asset Protection Allowance. The older a parent is, the more their assets are protected, meaning that they will be expected to contribute less towards the cost of education.
• Question 71: Your parents will be notified by email that the FAFSA has been completed.
• Question 72: This is the state the parents' drivers license is issued by.
• Question 73-74: States have varying criteria for determining whether you are a resident for purposes of state financial aid. This includes aid you may receive because of your parents' status.
• Question 75: This is an incredibly important question. The number of people in your parents' household determines how much parental income will be protected, meaning that your parents will be expected to contribute less towards the cost of education as the size of the household increases. This number includes you, your parents - even if you don't live with them - your siblings, and any other dependents who get more than half their support from your parents (grandparent, for example).

Start Your FAFSA - Financial Aid Application Form

• Question 76: How many people in your parents' household will be half time or more college students beginning in the fall semester? Always count the student. The number of family members in college directly impacts how much aid you get. The greater number of students in school, the less a parent is expected to pay for any one student's education.
• Questions 77-81: If anyone in your parents' household received benefits from the programs listed, indicate it here. There's a question with nearly identical wording later on for you. This question impacts some calculations of your expected family contribution (EFC); receiving any of these programs' benefits may qualify you for an automatic zero EFC, meaning you won't be expected to pay for college out of pocket.
• Question 82: As with the earlier question 33, ideally your parents will file their IRS federal tax return, even if they're not required to.
• Question 83: As with the earlier question 34, parents of dependent students will lose out on offsets to adjusted gross income if they use an IRS 1040EZ. Use the full 1040 form for maximum possible benefit, especially if there's a student already in college.
• Question 84: Make sure parents indicate their eligibility to complete a 1040Z or EZ, even though they'll be filing the full 1040, ideally.
• Question 85: A new question on the FAFSA, this one can be confusing. A dislocated worker is someone who meets ONE or more of the following:
  • Lost their job or been laid off.
  • Is receiving unemployment benefits and is unlikely to return to a previous occupation. (like a telephone switchboard operator, for example)
  • Is self employed but is unemployed due to economic conditions or natural disaster.
  • Is a displaced homemaker - someone who previously provided unpaid services to the family, like a stay at home parent, is no longer supported by a partner, and is having trouble finding a job.
• A dislocated worker is NOT:
  • Someone who quit.
  • Someone who got fired for cause.
  • Someone who just doesn't want to work.
• For 2009, we strongly recommend that parents file a complete IRS 1040 form. Parents should NOT use the 1040EZ as it lacks questions about tuition deductions and student loan interest, which can significantly offset adjusted gross income. Consult a qualified tax preparation professional or accountant for the best possible tax advice relating to your individual situation.
• Questions 86-88: If your parents have no taxes, they must fill in these fields with zeroes. Do not leave them blank under any circumstances!
• We strongly recommend that your parents complete their IRS 1040 federal tax return prior to doing the next section.
• Question 86: Adjusted gross income is line 37 on the IRS 1040. Note that previous lines have deductions for tuition and fees, student loan interest, moving expenses, and other offsets that may reduce your parents' adjusted gross income. This in turn will improve your eligibility for financial aid.
• Question 87: This is income tax paid. If your parents plan to file the FAFSA before they've completed their tax returns, they can estimate taxes paid by using any of the popular tax filling software programs and looking at the most recent pay stub.
• Question 88: Relatively straightforward copying the number from the appropriate line.
• Questions 89-90: This is purely a question of wages. Rather than use the IRS 1040, use the number from Box 1 on your parents' W-2 or your total raw pay from your parents' pay stubs to answer this. Do NOT use adjusted gross income, total tax, or anything other than wages earned from work.
• Question 91: The FAFSA data is as of the day you file it. Thus, if your parents are paying rent and have their monthly rent in their checking account, that pile of cash will count against them, albeit at a lower rate than the student's. If they paid rent the day before and there's nothing left in their checking account but crickets, that will work for both you and your parents. Make sure your parents have as little cash in checking, savings, and other cash-equivalents as possible on the day you file your FAFSA.
• Question 92: The net worth of your parents' investments includes real estate except for the house you live in, stocks, bonds, money market funds, etc. It's easier to say what is NOT included: retirement plans, life insurance, the house you live in. 529 plans are counted as investments of the parents.
• Question 93: If your parents own a small business with fewer than 100 employees or a farm, they don't have to report its net worth. They only have to do that for larger businesses or investment farms. If your parents do not own a farm or small business, put zero here.

Start Your FAFSA - Financial Aid Application Form

Question 94 is a five part question that used to be one of the FAFSA worksheets. It deals with additional financial information for the PARENT(S).

• Tip: with this section, make sure you put 0 for any line where you have no answer. Do not leave any line blank.
• Question 94a. More questions from the federal tax credit. Make sure you consult with a qualified tax advisor about which education tax credits your parents are eligible for.
• Question 94b. A question on child support. Make note that it does not include support for kids living with you in your parents' household.
• Question 94c. Your parents' taxable earnings from Federal Work Study will be listed on their pay stub, if any. Chances are this question will have an answer of zero, since it's unlikely your parents are working in Federal Work Study programs.
• Question 94d. This is for taxable scholarship aid reported in your parents' adjusted gross income and is specifically for scholarships that your parents have earned, not you the student. The answer to this question is likely to be zero unless your parents are enrolled in college at the same time as you and have earned scholarships.
• Question 94e. Be sure you report the taxable portion of your parents' combat pay specified in Box 12, Code Q on your W-2. Do NOT use the amount from Box 1!

Question 95 is a 9 part questionn that used to be one of the FAFSA worksheets. It deals with untaxed income. Remember that everything is from the perspective of the the parent or the family, NOT the student.

• Tip: with this section, make sure you put 0 for any line where you have no answer. Do not leave any line blank.
• Question 95a. This question deals with retirement savings usually administered by an employer. If your parents participate in a retirement plan of any kind at work, this should be on their W-2 form that they receive from their employer by the end of January of each year.
• Question 95b. This question deals with retirement savings usually set up by your parents. They should receive tax forms from those plans each year; once they've done their full IRS 1040, grab the number from line 28.
• Question 95c. This question deals with any kind of child support received for all kids in your parents' household.
• Question 95d. If your parents have earned interest on things like tax free savings bonds or other tax exempt financial services, grab line 8b from their IRS 1040.
• Question 95e-f. If your parents have received money from a retirement plan (cashed out), report the appropriate data from their IRS 1040. It's important to note that if they have rolled over a retirement plan from one company to another, or one plan to another, the rollovers don't count - only cash in hand (or its equivalent) counts. This would include, however, taking out a loan against a 401K or using a retirement account to buy a house.
• Question 95g. If your parents receive any kind of stipend from the military, clergy, or other organization where they don't really get a salary, report that here.
• Question 95h. Detail your parents' veterans benefits here. If they have any questions about veterans benefits, make sure they contact their VA education officer.
• Question 95i. Other untaxed income is kind of vague. Some examples shown are worker's comp or disability, but the more illustrative list is the list of what not to include, such as student aid (including scholarships), earned income credit, tax credits for kids, welfare, Social Security, workforce investment, combat pay, flex savings plans, foreign income, and most other tax credits like special fuels. Chances are most people don't have anything to add here - if you think your parents might, you'll want to consult a qualified financial planner with them.

Start Your FAFSA - Financial Aid Application Form

Move on to FAFSA Form Steps #5 and #6 »