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Ask Bob: Do Social Security or disability benefits count as income when filling out a FAFSA application?

A reader isn't sure if he needs to include his Social Security benefits or his wife's disability benefits on the FAFSA form. It depends, explains adviser Danielle Harrison.

Question

My son is a senior in high school and we are filling out the FAFSA (Free Application for Federal Student Aid). Does my wife's SSDI (Social Security Disability Income) count as income on that? Our only income is that and my Social Security benefits.

Answer

You do not have to include your wife’s Social Security Disability Income (SSDI)—and maybe not even your Social Security benefits—as long as they were considered “untaxed Social Security Benefits,” says Danielle R. Harrison, CFP®, Harrison Financial Planning.

“The combined level of income you and your wife received from Social Security, SSDI, and any other source annually determines if your benefits are taxed or not,” she says. As a married couple filing jointly, if your income was below $32,000 for the year you would not be taxed and would not have to include this amount on the FAFSA form. If your income fell between $32,000 to $44,000 up to 50% of your Social Security benefits would have been taxed and up to 85% for an income greater than $44,000. Any taxed Social Security benefits should be included on the FAFSA form. (For single filers the range is $25,000 to $34,000 versus $32,000 to $44,000 for married filing jointly.)

Harrison cautions, “Also, be aware that when filling out the FAFSA, you will be using your income (and tax return) from two years prior.” For those filling out the FAFSA form for the 2022-2023 school year you will use your 2020 income.

“If your financial situation has changed substantially since that time,” Harrison says, “you will want to contact the financial aid office of each higher education institution your child plans to apply to and make them aware of these changes. Some schools will take this into consideration and make adjustments to your child’s financial aid package.”

Got questions? Get answers!

Email Robert.Powell@maven.io

Question

My son is a senior in high school and we are filling out the FAFSA (Free Application for Federal Student Aid). Does my wife's SSDI (Social Security Disability Income) count as income on that? Our only income is that and my Social Security benefits.

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