Worksheet A

Payments to Tax-Deferred Pension and Savings Plans. Your parents must report money paid into tax-sheltered or deferred annuities (whether paid directly or withheld from earnings), including amounts reported on the W-2 Form, in Box 13, codes D, E, F, G, H, and S. You must include untaxed portions of your parents' 401(k) and 403(b) plans. Note that employer contributions to tax-deferred pension and savings plans should not be reported on the FAFSA as an untaxed benefit.

Deductible IRA and/or Keogh Payments. If your parents are eligible to exclude payments to an IRA/Keogh plan from taxation, those payments are reported as untaxed income. If payments to other pension funds are not excluded for tax purposes, they would already be included in AGI. IRA/Keogh plan payments can be found on IRS 1040 - total of lines 23 and 29; 1040A - line 15.

Child-support Received. Report child support your parents received for all children during 1999. Do not include foster care or adoption payments.

Welfare Benefits (including TANF Payments). Type the total amount of welfare benefits your parents received including Temporary Assistance for Needy Families (TANF) for 1999. Report the amount they received for the year - not monthly amounts. Do not include food stamps.

Tax-exempt Interest Income. Type the total amount of tax-exempt interest income your parents earned in 1999, as reported on Form 1040 - line 8b; or 1040A - line 8b.

Foreign Income Exclusion. The IRS allows eligible U.S. citizens and residents living in foreign countries to deduct certain foreign living expenses or to exclude a limited amount of income received for personal services rendered abroad from their income. Though deducted for tax purposes, this amount is considered untaxed income for federal student aid purposes. Provide the total amount of the foreign income exclusion your parents reported in 1999 from Form 2555 - line 43; or Form 2555EZ - line 18.

Untaxed Portions of Pensions. Payments from an untaxed portion of a pension or annuity must be reported as taxable income or untaxed income, as appropriate. The full amount of the distribution must be reported, whether a lump-sum or an annual distribution. The untaxed portion of such a pension and/or annuity payment can be calculated by adding Form 1040: (line 15a minus line 15b) plus (line 16a minus line 16b); or 1040A: (line 10a minus line 10b) plus (line 11a minus line 11b).

The only exception to reporting IRA or pension distributions as income is when these distributions are rolled over to another IRA or retirement plan within 60 days following the day on which your parents receive the distribution from the initial IRA or retirement plan.

Special Fuels Credit. Enter the total amount of credit for federal tax on special fuels that your parents reported in 1999, from IRS Form 4136 - line 9 (non-farmers only)

Untaxed Social Security Payments. If Social Security Benefits are paid to your parents on your behalf (because you were under 18 years old at the time), those benefits are reported as your parents' income, not your income.

Your parents must report benefits received on behalf of persons included in their household size as their income. However, if a member of your household, such as an uncle or grandmother, receives benefits in his or her own name, you (as head of household) do not report those benefits. (Remember, such persons may not be included in household size if they receive in their own names more than half of their support through such benefits.)

The actual amount of benefits received for the year in question must be reported, even if that amount represents an underpayment or an overpayment that may be compensated for in the next year. This parallels the IRS treatment of overpayments of taxable income (such as salary) that must be reported and are taxed as any other income. However, if the underpayment or overpayment was adjusted in the same year, only the net amount received during that year would be reported.

Housing Allowances. Housing, food, and other living allowances provided to your parents must be reported. This applies to compensation that some people, particularly clergy and military personnel, receive for their jobs. If your parents received free room and board in 1999 for a job that was not awarded as student financial aid, they must report the value of the room and board as untaxed income. (This category, "housing allowances," excludes rent subsidies for low-income housing.)

Workers' Compensation. Enter the total amount of workers' compensation your parents received in 1999.

Veterans Non-education Benefits. Type the total amount of veterans non-education benefits your parents received in 1999. Veterans non-education benefits include Death Pension, Dependency and Indemnity Compensation (DIC), etc. Do not include veterans educational benefits such as the GI Bill, Dependents Education Assistance Program, VA Vocational Rehabilitation Program, and VEAP Benefits.

Other Untaxed Income and Benefits. Your parents must report VA Educational Work-Study allowances as untaxed income. However, do not include contributions to, or payments from, flexible spending arrangements (also known as "cafeteria plans"), because these are essentially employee benefit programs. Also, do not include student aid or educational Workforce Investment Act (WIA), formerly JTPA, benefits.

Certain income and benefits should NOT be reported on this worksheet:

• Food stamps and other "in-kind" assistance. Benefits received from federal, state, or local governments from the following programs are not counted as untaxed income: the Food Stamp Program; Women, Infants, and Children Program; Food Distribution Program; Commodity Supplemental Food Program; National School Lunch and School Breakfast Programs; Summer Food Service Program; and Special Milk Program for Children.
• Dependent Assistance. Your parents may be eligible to exclude a limited amount of benefits received for dependent care assistance if certain requirements are met. Generally, up to $5,000 of benefits may be excluded from an employee's gross income, or $2,500 for a married employee who files a separate return from his or her spouse. This exclusion cannot exceed the employee's (or his or her spouse's) earned income. (Note: Some states provide reimbursement for childcare expenses incurred by welfare recipients through TANF. Your parents must report this on the application because you bill the state for the amount of childcare costs incurred while on welfare and are reimbursed on that basis.)
• Per capita payments to Native Americans. Your parents should not report individual per capita payments received in 1999 from the Per Capita Act or the Distribution of Judgment Funds Act unless any individual payment exceeds $2,000. Thus, if an individual payment were $1,500, they would not report it on your application. However, if a payment were $2,500, they would report the amount that exceeds $2,000: $500.
• Heating/fuel assistance. Exclude from consideration as income or resources any payments or allowances received under the Low-Income Home Energy Assistance Act (LIHEA). (Note: Payments under the LIHEA are made through state programs that may have different names.)

 Courtesy of: "Completing the 2000-2001 FAFSA," from the U.S. Department of Education