You may already know that the Free Application for Federal Student Aid, also known as the FAFSA, can be key to helping you afford college. Since you’re in the heat of tax season, you may be wondering how your tax returns, and when you filed, will affect your FAFSA application.
As a refresher, colleges and universities will use the FAFSA to determine what financial aid package to grant you. This includes all student loans, grants, scholarships, and federal work-study programs. So the application is a crucial step in the college progress.
Do I Have to Wait Until Our Tax Return is Out to File FAFSA?
On top of the federal, state and college FAFSA deadlines, you may be worried that you didn’t get around to filing your taxes yet and that this could affect your FAFSA application.
But don’t worry because you don’t need to wait to file your FAFSA.
The FAFSA form for the upcoming school year asks for tax returns from nearly two years prior. The government made this change in 2015 to help families that wanted to submit their applications earlier.
So for example, the 2019–20 FAFSA form, which became available Oct. 1, 2018, asks for 2017 tax information. If you’re filling out the 2018-2019 form, you’ll need 2016 tax returns.
You’ll need the returns for both the parents and the student to file.
Submitting your FAFSA form as soon as possible will help your family be considered for more money and ensure you don’t miss any deadlines, and this change will help you.
So the short answer is, no, you don’t have to wait to file your tax return this year to file FAFSA.
If We Have Not Filed a Tax Return, How do I Handle FAFSA?
In most cases, you will have already filed your tax return before the FAFSA application is released, which is October 18. However, if you did an extension, your return would not due until October 15.
If you need the full extension period to complete your taxes, you may not have the tax return information in time to submit your FAFSA as soon as it comes out.
If you haven’t filed yet, or don’t have your return yet, you can indicate “Will file” on the form and can use a late December 2017 paystub and your 2016 income tax return to provide estimates for questions about your income, as long as it is similar.
If your income is not similar, you can use the Income Estimator available when you complete the FAFSA online at www.fafsa.gov.
Once you file your return, you must update your FAFSA from “Will file” to “Already completed” and enter your final amounts.
What if Your Old Return Doesn’t Accurately Portray Your Family’s Current Financial Situation? Should I Use My New One?
If your family’s financial situation has changed dramatically since filing taxes, you should complete the FAFSA questions as required. Then, submit the FAFSA form, then contact the school you plan to attend and discuss your situation with the financial aid office.