All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Member
Posts: 2
Registered: ‎01-12-2018

Financial Aid and Taxes

I was a full time student in 2017 and did not work. I have 2 dependents. I do not plan to claim them on my taxes this year, as I did not have employment and did not pay anything in. My question is, if I allow their father to claim them (via IRS Form 8332), how does that affect me? Will I be disqualified for certain types of financial aid, if I allow my children to be claimed on the non-custodial parent's taxes?

Tax Pro
Posts: 6,070
Registered: ‎02-23-2016

Re: Financial Aid and Taxes

Hi ammata,

 

 

 

Welcome to the H&R Block community.

 

Your financial aid is based on YOUR income.  The only things that might affect it is if (1) you were married & filing jointly since your joint income might be higher with your spouse's income taken into account, and (2) if you are claimed as a dependent by another taxpayer since their income would be taken into account.  Note that the second one doesn't really affect many people because you have an option on the FAFSA to exclude your parents' information, but also note that some schools insist on having it.

 

Allowing your dependents' father to claim them in your situation is not going to affect your financial aid at all because you're obviously not filing with him, no longer married to him, or both.  Therefore, only your own income will be taken into account.  Your income is zero from the information you've provided so you'll be eligible for a good amount of financial aid benefits.

 

I have a question for you though.  How are you supporting your dependents with no income?  I ask because if someone else is supporting them (their father, a parent, etc.) then that person may be entitled to claim the kids without needing a Form 8332 depending on the situation.  If someone else is providing more than 50% of your support then you can also be claimed as a dependent by that person.  I would have to know the entire situation to be able to say who can legally claim the kids and whether or not Form 8332 is actually needed though as the rules are kind of complex.

 

Now for some great news.  You might be able to take either the American Opportunity Credit or the Lifetime Learning Credit to help with your college expenses.  If you are in your first four years you'll be looking at the AOC which is up to $1,000 refundable.  Make sure you keep track of your college expenses and how you paid for them so that you're ready when it's time to file your tax return.

 

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Member
Posts: 2
Registered: ‎01-12-2018

Re: Financial Aid and Taxes

Thank you for that information!

He is disallowed from claiming our children, by court order, unless I provide him with an 8332. As for anyone else having the right to claim us, I have hefty student loan debt and a small savings to thank for my ability to support myself and 2 children, while attending a rigorous program.
Tax Pro
Posts: 6,070
Registered: ‎02-23-2016

Re: Financial Aid and Taxes

You're quite welcome.