Independent Status improve financial aid / grants

[Anonymous]

My sister in law does not deduct her child from her taxes so his child files as independent (he’s 18 and lives at home but is going to college next year) and thus will apply for financial aid as financially independent. How does this work? Her DH is a CPA so I’m sure they are following a legal process, but I thought it was more involved and harder to declare?

[Anonymous]

No there's not...there's a lot out there on this. Google.

[Anonymous]

my kid also files his own taxes and we dont deduct him. he's not considered independent by colleges.

[Anonymous]

What they are doing is not going to work. They need to do more research.

[Anonymous]

Colleges calculate parental contribution if parents are alive.

[Anonymous]

For an 18 year old to be considered independent they need to be orphaned, join the military, get married, parent, or have been in the foster care system. There are also some circumstances such as fleeing domestic violence that is well documented that can lead to colleges finding someone to be independent.

[Anonymous]

as long as the parents haven't paid more than half of his expenses in the previous two years, he'll be fine. I assume he was paying rent at his own apartment, covering his health insurance, and all his groceries since he was 16? then he's FINE and can apply as an independent.

[Anonymous]

Anonymous wrote:What they are doing is not going to work. They need to do more research.

Is there a shady way to make it work? Like they live in their own apartment and work, but meanwhile income is funneled through gifts through other families so it’s under the gift tax? They may have granted them as an emancipated minor (like do courts check up to make sure they are really living on their own?), and then they moved out and try to qualify under unaccompanied provision. I mean how do you document “at risk of being homeless”?? Anyone is at risk of being homeless if income stops or savings dry up!

https://understandingfafsa.org/how-to-prove-you-are-an-independent-student-on-the-fafsa/

Other Circumstances
You qualify as legally independent on the FAFSA if at any time on or after July 1, 2024 you were “unaccompanied” (not in your parents’ care) and are either A) homeless or B) self-supporting and at risk of being homeless. This is a big change from prior years. The latest FAFSA law requires that colleges work with you in a supportive way to make it as easy as possible for you to prove your independence. See what proof you will need below.

FAFSA. At any time on or after July 1, 2025, were you unaccompanied and either (1) homeless or (2) self-supporting and at risk of being homeless?**

[Anonymous]

even emancipated minor isn't enough to get past CSS

[Anonymous]

Anonymous wrote:as long as the parents haven't paid more than half of his expenses in the previous two years, he'll be fine. I assume he was paying rent at his own apartment, covering his health insurance, and all his groceries since he was 16? then he's FINE and can apply as an independent.

So they rent a cheap apartment under his name, even if he never lives there, and claim the other expenses (like pay for groceries with his bank account), get cheap ACA healthcare plan — it would work 100%

[Anonymous]

Anonymous wrote:What they are doing is not going to work. They need to do more research.

It is working, they said they got a huge FA package. Meanwhile they own a huge home, a vacation home in Tahoe, and will inherit $10s of Ms (and even now get income from trust).

[Anonymous]

I do not believe this. Either they lied, or this is a teen posting in hopes of getting an apartment etc paid for.

[Anonymous]

Anonymous wrote:My sister in law does not deduct her child from her taxes so his child files as independent (he’s 18 and lives at home but is going to college next year) and thus will apply for financial aid as financially independent. How does this work? Her DH is a CPA so I’m sure they are following a legal process, but I thought it was more involved and harder to declare?

I had just helped a kid (a mentee) obtain an independent status. From what you are describing, this won’t fly - earning money and not being claimed on tax return is not enough to be considered independent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What they are doing is not going to work. They need to do more research.

Is there a shady way to make it work? Like they live in their own apartment and work, but meanwhile income is funneled through gifts through other families so it’s under the gift tax? They may have granted them as an emancipated minor (like do courts check up to make sure they are really living on their own?), and then they moved out and try to qualify under unaccompanied provision. I mean how do you document “at risk of being homeless”?? Anyone is at risk of being homeless if income stops or savings dry up!

https://understandingfafsa.org/how-to-prove-you-are-an-independent-student-on-the-fafsa/

Other Circumstances
You qualify as legally independent on the FAFSA if at any time on or after July 1, 2024 you were “unaccompanied” (not in your parents’ care) and are either A) homeless or B) self-supporting and at risk of being homeless. This is a big change from prior years. The latest FAFSA law requires that colleges work with you in a supportive way to make it as easy as possible for you to prove your independence. See what proof you will need below.

FAFSA. At any time on or after July 1, 2025, were you unaccompanied and either (1) homeless or (2) self-supporting and at risk of being homeless?**

I went through college on a lot of financial aid. I fully supported myself from 18 on, including rent, utilities, food and healthcare working multiple jobs to put myself through school. I filed my own taxes.

I still had to report parent income on my federal financial aid forms.

I doubt that has changed or everyone would do it.

If he is your CPA, I would probably search for someone more qualified.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What they are doing is not going to work. They need to do more research.

It is working, they said they got a huge FA package. Meanwhile they own a huge home, a vacation home in Tahoe, and will inherit $10s of Ms (and even now get income from trust).

It sounds like they committed fraud.