Simplified Versions of FAFSA

 

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Determining the Eligibilityshutterstock_312382469

The questions in this section, and the questions about means-tested federal benefit program are meant to check the student’s eligibility for the Simplified versions of the FAFSA. Basically, there are two simplified versions of the FAFSA, and those are:

  • Simplified Needs Test.
  • Auto-Zero EFC.

Related:Understanding the Reportable and Non-Reportable Assets

Both the forms of the simplified versions of the FAFSA provide some or the other kind of financial benefits to the students. To qualify for the simplified versions of the FAFSA, one must fulfill the following conditions:

  • To qualify for the Simplified Needs Test, the student’s parent’s AGI should be less than $50,000, and to qualify for the Automatic-Zero EFC, the AGI has to be less than or equal to $25,000. If the parents belong to the non-tax filing category, then the income earned from work will be substituted for AGI.
  • The student’s parents should be eligible to file the IRS Form 1040A or 1040 EZ.
  • Parent is a dislocated worker.
  • If anybody in the household has received any kind of federal means-tested benefits during the last two years.

**Only the parent’s income is taken into account while deciding on the student’s eligibility for the simplified versions of the FAFSA.

Related:Does an independent student need to report his/her spouse’s assets?

For a taxpayer to be eligible to file the IRS Form 1040A or 1040EZ, he/she should fulfil the following criteria:

  • His/her annual income should be less than $100,000.
  • He/she should use the standard deduction.
  • He/she should not receive self-employment income from a business or farm.
  • He/she should not receive any alimony.

**Though, one must be able to file the forms 1040A or 1040EZ to be eligible for the simplified versions of the FAFSA, still anybody who has filed 1040 to solely claim an education tax credit, such as the American Opportunity Tax Credit or the Lifetime Learning Tax Credit, is considered eligible for a simplified version of the FAFSA.

**A person is also considered to be eligible for the simplified versions of the FAFSA, if he/she has filed the IRS form 1040 to claim the earned income tax credits.

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Other lessons on FAFSA