Both the student and spouse, and the parents of dependent students
must provide information on each of the worksheets. On the printed form,
the student/spouse and parent information is entered in separate columns; for
the online version, the questions are asked separately for each filer.
The calculations are summed at the bottom of each of the three
worksheets, and just one number is entered on the FAFSA. The reason for
this is that the complex federal methodology for calculating the Expected
Family Contribution assigns different weights to various types of income.
Also, state or institutional programs may have different ways of accounting
for certain types of income in their own methodologies.
Worksheet A
This worksheet asks about the following sources of credits or benefits:
• Earned income credit. This refundable tax credit is available to
persons who work but earn low wages. It is intended to offset
the cost of other taxes such as those for Social Security and
Medicare. As a refundable credit it can be issued to people who
pay no taxes or pay taxes that are less than the amount of the
credit, both of which result in a payment to the family. In order
to be eligible, a low-income worker must maintain a home in the
United States, with at least one child living there.
• Additional child tax credit. Every taxpayer with less than
$110,000 in modified AGI is entitled to a tax credit for each child.
The amount was $700 in 2005, and is scheduled to increase
to $800 per child in 2009 and $1,000 per child in 2010. Very
low-income taxpayers—and those who have higher incomes
and a large number of deductions that bring the modified AGI
down to near zero—can also receive additional tax credits.
• Welfare benefits, including Temporary Assistance for Needy
Families (TANF).
• Social Security benefits that were not subject to tax (such
as SSI) received by any household member. For retirees
and other recipients with relatively large amounts of personal
income from other sources, a portion of Social Security
payments received may be taxable. This question seeks to
determine—for financial aid decision-making purposes—the
total amount of those benefits that were not subject to taxes.
For more information about untaxed Social Security benefits,
consult the Social Security Administration by calling (800) 772-
1213 or visiting www.ssa.gov. Excluded from this section are
food stamps and subsidized housing payments.
Worksheet B
This worksheet is a grab bag of other sources of income and credits that
are not specifically identified on some tax forms or in other questions on the
FAFSA. In most cases, this is a situation in which the federal government
is seeking to avoid giving double benefits to people who receive credits or
payments that are not subject to tax; when it comes to calculating financial
aid, that money will be taken into account when the U.S. Department of
Education calculates the Expected Family Contribution.
For many financial aid applicants, many of these questions are not
relevant.
• Payments to tax-deferred pension and savings plans. These
include funds paid directly or withheld from earnings and
reported on the student’s or parent’s W-2 Form. These might
include 401(k) and 403(b) pension plans and tax-sheltered
investments available through employers. If you have any
uncertainty about this question, consult a qualified tax preparer,
the IRS, or a financial aid office.
• IRA deductions and payments to self-employed SEP, SIMPLE,
and Keogh and other qualified plans. The information sought
here is the total amount of tax-deductible payments to private
retirement accounts set up under qualified programs.
• Child support you received for all children. Child support is
not taxable, but the financial aid formula takes it into account
in determining the EFC. Do not include foster care or adoption
payments in this total.
• Tax-exempt interest income. Some or all of the interest
on certain governmental bonds and other special financial
instruments are exempt from taxation.
• Foreign income exclusion. Certain U.S. citizens and residents
living in foreign countries can deduct a portion of their living
expenses or exclude from taxation some income received as
compensation for work performed abroad. Although this may
not be taxed by the IRS, this income is included in the calculation
for federal student aid and must be reported here.
• Untaxed portions of IRA distributions, and untaxed portions
of pensions. Certain withdrawals from an IRA or a qualified
pension are not subject to taxation after a set age. Again, the
financial aid formula is seeking to account for untaxed income in
calculating financial aid. Do not include rollovers—the transfer of
funds in one IRA or pension account to another account without
a withdrawal to your personal funds.
• Credit for federal tax on special fuels. Certain nongasoline
fuels used in motor vehicles on public highways (not on private
property, including farms) are not subject to tax, and users are
given a tax credit; some of these special fuels include diesel,
kerosene, LPG (propane), CNG (compressed natural gas), and
experimental fuels. If you received a credit for use of these fuels
you are required to report it on IRS Form 4136, and the credit
earned on that form is reportable here. The credit is considered
untaxed income when financial aid is calculated.
• Housing, food, and other living allowances paid to members
of the military, clergy, and others. Certain payments including
living allowances or free room and board may not be considered
taxable on IRS forms, but are of interest to the Department of
Education in calculating financial aid. If a benefit, such as free
room and board, was provided to a parent or student, the cash
value of that benefit must be calculated and listed here. This
line is not meant to account for rent subsidies received for lowincome
housing.
• Veterans’ noneducation benefits such as Disability, Death
Pension, Dependency & Indemnity Compensation (DIC), or
VA Educational Work-Study allowances. Untaxed benefits
are considered income when it comes to calculating federal
financial aid.
• Any other untaxed income or benefits not reported elsewhere
on Worksheets A and B, such as workers’ compensation, untaxed
portions of railroad retirement benefits, Black Lung Benefits, and
disability. This is a catchall category seeking to account for any
other untaxed income or benefits not reported elsewhere on the
first two worksheets. Excluded from this question are student
financial aid, Workforce Investment Act education benefits, or
benefits from flexible spending arrangements (also known as
cafeteria plans) in which workers are given a choice of cash or
nontaxable benefits.
• Money received, or paid on your behalf not reported elsewhere
on this form. If the student (not the parents) received cash
support from a friend or relative other than parents, or if someone
other than the student is paying some or all of the cost of rent,
utilities, and other expenses while he or she is in school, that is
considered untaxed income for purposes of calculating the EFC.
Worksheet C
The items accounted for here include education credits claimed on
IRS forms, child support paid to other households, and taxable income from
federal work-study and other employment programs.
• Education credits. The HOPE Education Tax Credit is a tax
credit available to parents or students for the first two years
of college or postsecondary education. The Lifetime Learning
Credit provides a tax credit to parents and students at any time.
As noted in Chapter 8, you cannot claim both credits for the
same student in the same year.
• Child support you paid because of divorce or separation or by
court order or other legal requirement. This amount does not
include support for children in the student’s own household, or
in the parent’s household.
• Taxable earnings from need-based employment programs,
such as federal work-study. Also included are any need-based
employment portions of fellowships and assistantships. Do
not report any other sources of need-based income that are
accounted for elsewhere on Worksheet C.
• Student grant and scholarship aid reported to the IRS as
part of adjusted gross income. Included here are grants,
scholarships, waivers, AmeriCorps benefits, and the grant or
scholarship portion of fellowships. Note that the question is
asking for that portion which makes its way into the AGI.
Federal School Codes
Applicants for financial aid need to inform the Department of Education
of the code number of the school or schools to which they want the SAR and
EFC sent. If you have already been accepted to a college and plan to attend there,
you should enter only the code for that institution. If you are applying to more
than one college or university, you should enter all applicable codes so that you
do not miss any financial aid deadlines. The codes are available from the schools’
financial offices, from Web sites, and as part of the FAFSA on the Web.
If you are using the FAFSA on the Web and are filling out a renewal
of a form submitted in previous years, the codes used in the past will be
automatically filled in. The first time you filled out the form you may have asked
the government to send the data to more than one school; you should remove
any schools that you are not planning to attend in the coming school year.
For each school code you will also be asked to indicate your expected
housing plan: on-campus, off-campus, or with parent. Your selection here
will affect the total cost of attendance and may be relevant to a particular
school’s institutional financial aid.
Read More: FAFSA Worksheets A, B, and C
