collecting ss with minor, FAFSA affected?

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Topic Author
jgt808
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Joined: Mon Jul 16, 2018 1:21 am

collecting ss with minor, FAFSA affected?

Post by jgt808 »

Hello all. Although it's a couple years out, my spouse plans to take SS at 62 (lower earner) while our child is under 18. Our son is 11 and will be 14 when SS benefits start, so we should be able to collect 50% of FRA benefits and SS calc confirms this is the better route. I will still be working for several more years though as I am younger.

My question is, will claiming him affect the FAFSA as it would be technically considered my son's money? We are and will continue to be in the 12% tax bracket during these high school and college years. If anyone has insight, I couldn't find any info online about this. Thank you to the BH community, I've learned so from you folks.
123
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Re: collecting ss with minor, FAFSA affected?

Post by 123 »

The SSA benefit for a child is considered as belonging, and potentially taxable, to the child. Child benefits generally end at age 18 so it likely would not impact income during his college years very much.
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Topic Author
jgt808
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Re: collecting ss with minor, FAFSA affected?

Post by jgt808 »

Thank you for the reply 123. I read that the FAFSA application starts a couple years prior to college, maybe their junior year? That was my concern, if he was 16 and still getting the SS money. Wondered if that would affect our ability to get Pell grants or such. It's a small amount maybe $500 a month, but I read that the child's assets/income count for much more than ours on the FAFSA.
123
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Re: collecting ss with minor, FAFSA affected?

Post by 123 »

Schools can make adjustments to aid if income has changed from what was reported on the FAFSA application. https://studentaid.gov/h/apply-for-aid/fafsa
The closest helping hand is at the end of your own arm.
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celia
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Re: collecting ss with minor, FAFSA affected?

Post by celia »

jgt808 wrote: Wed Sep 22, 2021 2:31 pm Hello all. Although it's a couple years out, my spouse plans to take SS at 62 (lower earner) while our child is under 18. Our son is 11 and will be 14 when SS benefits start, so we should be able to collect 50% of FRA benefits and SS calc confirms this is the better route.
Better than what?
My question is, will claiming him affect the FAFSA as it would be technically considered my son's money?
He’s your dependant, whether you claim him or not on your taxes (assuming you provide over half of his support).

If your son is collecting SS, it is HIS money and will be expected to be spent on college (according to the FAFSA).
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teen persuasion
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Re: collecting ss with minor, FAFSA affected?

Post by teen persuasion »

jgt808 wrote: Wed Sep 22, 2021 2:51 pm Thank you for the reply 123. I read that the FAFSA application starts a couple years prior to college, maybe their junior year? That was my concern, if he was 16 and still getting the SS money. Wondered if that would affect our ability to get Pell grants or such. It's a small amount maybe $500 a month, but I read that the child's assets/income count for much more than ours on the FAFSA.
There is a student income protection amount, currently ~$7k. So if $500/mo is his only income, that would zero it out. If he has other income, some would be included in your FAFSA calculations.

I don't have any experience with SS income for dependents, so I don't know how it is taxed. On the FAFSA you begin with AGI from prior-prior year tax returns, and add back untaxed income (like deductible tIRA contributions) - the section of the FAFSA for untaxed income says NOT to add untaxed SS income. So that could affect both the parents' reported income and the student's reported income.

FAFSA Simplification was passed last year, but the implementation is apparently being phased in. The methodology used when your child files may not be the same as that used today. They are reducing the number of questions from over 100 to 30-something.

In the past I have googled "paper FAFSA" to see a pdf of the "paper" form, for the explanations of what they want as inputs for various lines. It's a throwback; normally you file online, and the questions asked may skip sections depending on your answers. But it has much more thorough information on what it expects, and what to include or not.

You can google "EFC calculations 2022-23" to find the formulas for calculating your EFC (changing to SAI, with Simplification). Walk thru the steps with the inputs from the paper FAFSA lines, to see what will have the greatest effect on your EFC. Also look at the special cases, to see if you might qualify: auto EFC zero, or Simplified Needs Test. If you might be eligible, make sure you stay eligible when your child is applying. There are multipart eligibility rules, and income cliffs. This is another area that's changing with Simplification, but it's not clear when.
Topic Author
jgt808
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Re: collecting ss with minor, FAFSA affected?

Post by jgt808 »

thank you everybody for the detailed responses. I did watch a video regarding the FAFSA simplification form, but the student income protection at 7k is helpful information. And Celia, 'better than what'? I meant it was better for my spouse to file early at 62 (w/ reduced benefits), but with our son collecting for 4 years, rather than waiting until 67 and getting a bigger monthly check. That was our thinking and we plugged it into a SS calc and that was the recommendation. Thanks again for replies.
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