fafsa question

[taxmom34]

granddaughter has friend who earned $2000 and is a full time student for 4 semesters, age 22. friend claims that claiming her own dependency will give her more funds when filing fafsa. She lived with her parents but was told if parents claim her she won't get or will only receive minimum from fafsa. if any of you are familiar with filling out these forms which of the two scenarios is true? the friend also has $3300 in scholarships & grants

[Steve Stang]

I'm familiar with the forms and help folks with these. Yes, there may be a difference if someone is independent. But tax dependency and financial aid dependency are different matters that most folks don't understand. (For financial aid reasons you're still 'dependent' even at age 24).

I would need additional information to run the numbers through the software I use for calculating EFC and FAFSA answers.

I don't want to go against protocol for the forum but I'm happy to run through numbers if that helps.

[Lion]

Student can NOT claim her own dependency if someone else is eligible to claim her as a dependent, even if someone doesn't claim her. Parents seem eligible to claim their daughter. How would daughter live on $2,000 even if tuition is only the $3,300 she got in scholarships and grants?! If I were working for an admissions department, I wouldn't want to accept a student who lies and cheats on her paperwork.

[ruthc]

Can't claim dependency if someone else can?

Where does it state she can't take a dependency deduction for herself if someone else can claim her?

[David1980]

Where does it state she can't take a dependency deduction for herself if someone else can claim her?

http://www.irs.gov/publications/p17/ch03.html#en_US_2013_publink1000170848

"You can take one exemption for yourself unless you can be claimed as a dependent by another taxpayer. If another taxpayer is entitled to claim you as a dependent, you cannot take an exemption for yourself even if the other taxpayer does not actually claim you as a dependent."

[David1980]

granddaughter has friend who earned $2000 and is a full time student for 4 semesters, age 22. friend claims that claiming her own dependency will give her more funds when filing fafsa. She lived with her parents but was told if parents claim her she won't get or will only receive minimum from fafsa. if any of you are familiar with filling out these forms which of the two scenarios is true? the friend also has $3300 in scholarships & grants

Just look at the FAFSA, specifically step 3.

https://fafsa.ed.gov/fotw1314/pdf/PdfFafsa13-14.pdf

The questions in step 3 determine whether they need to enter parent's information. That includes things like if they have children of their own, legal emancipation under a court, etc. Notably missing is "are you claimed as a dependent?" - that question has no bearing. So for the FAFSA, it doesn't matter if the parents claim the child. I suppose the child could find someone to marry in order to avoid reporting parents info.

[taxmom34]

I don't have fafsa forms available to me. Granddaughter's friend insists she will claim herself on her return, I explained over phone that parents should claim her on their return (especially since she lived with them all year) and there just might be education credit based on the $500 spent other than scholarships, and that her income was so low she would lose the credit. she insists that she will get more if she claims herself when applying for fafsa. I never had to deal with fafsa with any clients in the past and of course now that I have retired I still get asked tax questions.

[jsamans]

...Granddaughter's friend insists she will claim herself on her return, I explained over phone that parents should claim her on their return (especially since she lived with them all year) and there just might be education credit based on the $500 spent other than scholarships, and that her income was so low she would lose the credit. she insists that she will get more if she claims herself when applying for fafsa...

You can only give them the best advice; then you have to leave it to them to learn the hard way. As several others have stated, tax status does not make someone "independent" for purposes of financial aid. There are only a handful of things that classify someone as independent when under 24, including veteran status, marriage, and legal emancipation; you might point them to the Department of Education page on dependency for reference, but that's all you can do.