A school received an IRS Wage and Income Statement to confirm a parent’s income. The parent indicated she is medically discharged and receiving disability benefits. On the wage and income statement, there is a Form SSA-1099 Benefits Statement and a 1099-R Distribution from Pensions, Annuities, and Retirement. The total amount exceeds the 2017 gross filing amount of $13,400 for someone who is head of household. Is this parent required to file?
There is not enough information to make this determination. In IRS Publication 17, a 1099-R can come as a result from distributions from IRAs; pensions, annuities, capital gain, and disability income. If it is from pensions and annuities, then the full amount reported may not be taxable, which is also the case with income reported on an SSA-1099, the full amount may not be taxable. Gross income is “all income you received in the form of money, goods, property, and services that isn't exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Don't include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2017 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the Instructions for Form 1040 or Pub. 915 to figure the taxable part of social security benefits you must include in gross income. Gross income includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, don't reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9."
Therefore, you cannot use the gross amount reported as the parent's gross income. Additional information would be needed from the parent and/or a tax preparer to complete verification.
For additional information, try NASFAA's Student Aid Index. It is a central hub of all the important financial aid resources you need with direct links to legislation, regulation, Dear Colleague Letters, and other ED and NASFAA references. It is updated on a rolling basis with the latest news and changes. Search Verification.
Test your financial aid knowledge with past pop quizzes based on real scenarios from financial aid offices on our Pop Quizzes page.
Publication Date: 11/21/2019