Financial Aid

Can a Dependent Student File the FAFSA as Independent if the Student's Parents Don't File Federal Income Tax Returns?

Most students are considered dependents, but can you file as an independent to prevent a FAFSA hold up?

Shawna Newman

July 22, 2020

Can you submit your FAFSA without your parents' tax documents? See if you qualify for a dependency override. It's not as easy as you think.
Can a Dependent Student File the FAFSA as Independent if the Student's Parents Don't File Federal Income Tax Returns?
According to studentaid.gov, the student aid programs are based on the idea that your parents and you will be paying for your college education. “A dependent student is assumed to have the support of parents,” meaning you will need their financial information to file your FAFSA. However, this doesn’t mean your parents must pay for your education. This system of reporting was developed to get a concise picture of your financial background and resources. To create a somewhat standardized financial reporting system for American college students, with the idea this is the fairest way to distribute government financial aid. As you can imagine, there are many circumstances and situations that make gathering your parents' financial information or federal income tax returns hard. Some students feel like they can claim themselves as independent when they’re really considered dependent according to the office of Federal Student Aid. If you’re wondering Do I have to claim my parent’s income on the FAFSA? Or Am I independent or dependent? You can find the answer to this common question by answering a few yes/no questions at studentaid.gov. Some students find themselves in a difficult position if their parents don’t file their income tax returns. Take this student’s situation as an example: “I’m 22 years old, and I don't receive any financial aid. I've tried to fill out the FAFSA but I have an obstacle. I claim myself and no one else on my taxes. No one claims me. My mom does not fill out a tax return because she doesn't get a W-2. (She works as a bartender at a very small bar and is paid in cash only.) I still live at home with her, but other than that I don't get any financial help from her. Am I able to fill out a FAFSA without providing any of her information, or do I have to wait until I'm 24?” — Angela T. If you are a dependent student, your parents must complete the FAFSA—your parents’ income must be claimed on your FAFSA. Your parents must also supply copies of their federal income tax returns if requested by the college financial aid administrator. If you’re considered an independent student, parental information is not required on your FAFSA. In most cases a student who is under age 24 by January 1 of the academic year is considered to be a dependent student, regardless of whether the student is claimed as an exemption on the parent's federal income tax return and regardless of whether the student is financially self-sufficient. You may be an independent student if you are: Married A graduate student A military veteran or active duty member of the United States Armed Forces An orphan Claim a dependent other than a spouse A parent or have children

Dependency Overrides

When there are unusual circumstances, you can appeal to your college’s financial aid administrator for a dependency override. Unusual circumstances do not include any of the following circumstances, alone or in combination: You take care of yourself financially or you’re self-sufficient. Your parents do not claim you as an exemption on their federal income tax returns. Your parents refuse to complete the FAFSA. Your parents reject filing federal income tax returns or other documentation during verification. Your parents will not contribute to or pay for your college education. College financial aid administrators grant dependency overrides in rare circumstances. The student might receive a dependency override if: Both parents are incarcerated or institutionalized. There is an abusive family environment, such as when there are court protection from abuse orders against the parents. Living at home with one's parents, however, is inconsistent with most of the circumstances that typically justify a dependency override. College financial aid administrators generally do not grant dependency overrides for a failure to file required federal income tax returns. Guidance from the US Department of Education requires college financial aid administrators to know "(1) whether a person was required to file a tax return, (2) what the correct filing status for a person should be, and (3) that an individual cannot be claimed as an exemption by more than one person."

Conflicting Tax Information on the FAFSA

Discrepancies involving these aspects of federal income tax returns are considered conflicting and college financial aid administrators may not disburse federal student aid until the conflicting information is resolved. Colleges must also resolve all conflicting information before making any adjustments to the data elements on a student's FAFSA, including a dependency override. Accordingly, a failure to file a federal income tax return when required would not be considered an unusual circumstance that justifies a dependency override. These strict guidelines prevent financial aid administrators from giving federal student aid when the student, the student's spouse or a dependent student's parents fail to file federal income tax returns and were required to do so. American taxpayers are required to file federal income tax returns when his or her annual gross income exceeds certain filing thresholds. You can find 2019 and 2020 filing thresholds on the IRS Website. Thresholds are equal to the sum of the exemption amount and the standard deduction. But if someone's income falls below these thresholds, the college's financial aid administrator will wonder how they were able to support themselves. Such a FAFSA is likely to be flagged for verification. According to eFile.com, employers who pay an employee $600 or more per year must provide the employee with an IRS Form W-2 regardless of whether the employee is paid by check or in cash. Likewise, if the employer pays $600 or more a year to a non-employee contractor, the employer must provide the contractor with an IRS Form 1099. Failure to provide employees with W-2 or 1099 forms may be a sign that the employer is engaged in tax evasion. An employee must still file a federal income tax return even if his or her employer did not provide a W-2 or 1099 statement as required by the IRS. Even if the employee's gross income falls below the filing thresholds, the employee may still be required to file a federal income tax return to pay Social Security or Medicare taxes. The employee will have to attach IRS Form 4852: Substitute for Form W-2 or Form 1099-R to their federal income tax return. Otherwise the employee is also engaged in tax evasion. It is best to seek the advice of a qualified accountant in such a situation. Clearly, if an employer is engaged in tax evasion, the employee may lose his or her job by reporting the employer to the IRS. This puts the employee in a difficult situation. But no tax return means no federal student aid.

Find FAFSA Help

If your confused about filling your FAFSA, no matter the circumstances, a great start is to visit the Federal Student Aid’s “Get Help” page. Here you and your parents can find common questions and answers. If you still cannot find your question or answer, you can chat with or email a FAFSA representative. You may also consider calling or emailing a financial aid professional in your college’s financial aid office.

Get Scholarship Money

After you’ve filed your FAFSA it’s important you also look for scholarship money to help you pay for college and avoid any excessive student loan debt. Sign up to create a FREE custom profile and let Fastweb’s state-of-the-art database find scholarships that fit you!

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