FASFA parent claiming or not claiming child as dependent
Good morning Terry,
I’m self employed an a 1099 employee. I have Marketplace (Obamacare) Insurance. My daughter is turning 21 in May. She is working 32 hours a week has an apartment leased in her name. I have previously listed her as a dependent on my taxes. Listing myself asHead of Household. I am divorced and legally can list my daughter. When I file my taxes for 2022 and moving forward I wasn’t going to claim my daughter. The reason being. First of all she doesn’t live with me secondly her income affects my monthly premiums for Obamacare. I I talked to my accountant and it has no impact on my taxes. I will still be the parent for her FASFA. I’m pretty sure this will not impact what she receives from financial aid. Unfortunately I told my ex husband my plan. He is harassing me. Telling me this will impact and reduce her grant and what she receives. The only reason I see that her financial aid maybe impacted is because she is working 32+ hours a week. My income has not changed. Can you please clarify this for me. Because I’m confident that me not claiming her won’t reduce her financial aid. I will still be the parent for her FASFA since my income is significantly lower than her father’s
Terry Says
If she can demonstrate that she is paying for more than half of her “upkeep” (not including college tuition), then she can file as an emancipated student. Only her income would count toward future financial aid. And she might even be able to convince her college that since she is emancipated, she deserves more aid directly from the school.
But then SHE needs health insurance. And she would have to register — right away — by Jan 15th for “Obamacare”. And who would pay for that?? So, by doing this you might not come out ahead.
I suggest going over these issues with your tax consultant to see where the true costs and benefits lie.
But your ex is wrong in saying that emancipation will reduce her “grant” (Loan?).
This is truly about your loss of her as a dependent on your return, your lower cost of healthcare, and HER need to be covered (maybe the school has a health policy for full-time students?). And most of all it is about whether she can demonstrate that she pays for more than half of her living expenses through her earnings.
