FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
b0B
Posts: 513
Joined: Fri Oct 19, 2018 11:39 am

FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Fri Oct 26, 2018 11:37 pm

What happens to the FAFSA Simplified Needs Test
http://www.finaid.org/educators/needs.phtml
now that (as of tax year 2018) forms 1040A and 1040EZ are gone? The SNT requires that you could have used one of these forms. Has anyone seen how the SNT rules will now be formulated?

User avatar
teen persuasion
Posts: 784
Joined: Sun Oct 25, 2015 1:43 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by teen persuasion » Sat Oct 27, 2018 6:24 am

Good question - I've found nothing so far.

Soon2BXProgrammer
Posts: 610
Joined: Mon Nov 24, 2014 11:30 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by Soon2BXProgrammer » Sat Oct 27, 2018 8:47 am

b0B wrote:
Fri Oct 26, 2018 11:37 pm
What happens to the FAFSA Simplified Needs Test
http://www.finaid.org/educators/needs.phtml
now that (as of tax year 2018) forms 1040A and 1040EZ are gone? The SNT requires that you could have used one of these forms. Has anyone seen how the SNT rules will now be formulated?
joke: I suppose if the forms don't exist, then no one will qualify. accidental casualty of trumps new tax plan? you decide for yourself.

actually i'm interested in this discussion myself.. of course my children are young enough that it will probably all change again by then.

workerbeeengineer
Posts: 142
Joined: Thu Jun 02, 2016 12:22 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by workerbeeengineer » Sat Oct 27, 2018 9:41 am

Since FAFSA indicated that our EFC was larger than the cost of attendance at our child's chosen University, there was no aid awarded other than the offer to take out loans (student and parents). I'm sure whatever tweaks that were made to the FAFSA to account for the changes in the tax laws will still result in our EFC being higher than cost of attendance. Thank goodness for the 529 plan!

Soon2BXProgrammer
Posts: 610
Joined: Mon Nov 24, 2014 11:30 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by Soon2BXProgrammer » Sat Oct 27, 2018 10:40 am

workerbeeengineer wrote:
Sat Oct 27, 2018 9:41 am
Since FAFSA indicated that our EFC was larger than the cost of attendance at our child's chosen University, there was no aid awarded other than the offer to take out loans (student and parents). I'm sure whatever tweaks that were made to the FAFSA to account for the changes in the tax laws will still result in our EFC being higher than cost of attendance. Thank goodness for the 529 plan!
just so you are aware.. the simplified means test allows you if you have a low enough income to ignore all assets. this means if you have 10M, but less than 50k of income, you could ignore the 10M for the purposes of financial aid. that is why i am interested in it. (and potentially the OP).

Topic Author
b0B
Posts: 513
Joined: Fri Oct 19, 2018 11:39 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Sat Oct 27, 2018 12:47 pm

The rules are somewhat complex and seemingly arbitrary. Maybe it didn't start that way, but was caused by trying to conform the rules to other tax changes over time. So there's this list here
http://www.finaid.org/educators/needs.phtml
of many things that would force you to use form 1040 rather than 1040A and 1040EZ, thus disqualifying you for SNT (except for some other exceptions - yet more complexity). But once the distinction between the forms disappears, the items of the list in the link will seems even more arbitrary. If they keep that list, presumably by making it explicit, it will basically be a list frozen in place by historical accident. But making a blunder with this stuff can cost $k's so I can't ignore it if it has a chance of being relevant.

Our first FAFSA year is 2022 (oldest starts college in 2024) so I'm trying to plan. E.g. will I need to avoid needing sched D, HSA transactions etc.

clydewolf
Posts: 743
Joined: Tue Jul 21, 2015 12:51 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by clydewolf » Sat Oct 27, 2018 2:39 pm

Prior to 2018, every tax payer could use Form 1040. Both the 1040-A and 1040-EZ are simplified versions of the 1040. The simplified versions of the 1040 are gone. You will just have to use form 1040.

Topic Author
b0B
Posts: 513
Joined: Fri Oct 19, 2018 11:39 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Sat Oct 27, 2018 3:36 pm

clydewolf wrote:
Sat Oct 27, 2018 2:39 pm
Prior to 2018, every tax payer could use Form 1040. Both the 1040-A and 1040-EZ are simplified versions of the 1040. The simplified versions of the 1040 are gone. You will just have to use form 1040.
And what are the implications for SNT?

mnnice
Posts: 415
Joined: Sat Aug 11, 2012 5:48 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by mnnice » Sat Oct 27, 2018 4:16 pm

b0B wrote:
Sat Oct 27, 2018 3:36 pm
clydewolf wrote:
Sat Oct 27, 2018 2:39 pm
Prior to 2018, every tax payer could use Form 1040. Both the 1040-A and 1040-EZ are simplified versions of the 1040. The simplified versions of the 1040 are gone. You will just have to use form 1040.
And what are the implications for SNT?
Maybe that you should apply for free or reduced lunch and not worry about tax forms :?

Your time horizon is still far enough away that lots of rules could change :wink:

Spirit Rider
Posts: 10511
Joined: Fri Mar 02, 2007 2:39 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by Spirit Rider » Sat Oct 27, 2018 4:23 pm

b0B wrote:
Sat Oct 27, 2018 3:36 pm
And what are the implications for SNT?
That is the crux of the question without a current answer.

As alluded to, instead of a simple form determination, there will likely be an SNT exclusion list of lines on the new Form 1040 Schedules 1-6.

DIFAR31
Posts: 304
Joined: Mon Jan 01, 2018 5:51 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by DIFAR31 » Sat Oct 27, 2018 4:38 pm

b0B wrote:
Fri Oct 26, 2018 11:37 pm
What happens to the FAFSA Simplified Needs Test
http://www.finaid.org/educators/needs.phtml
now that (as of tax year 2018) forms 1040A and 1040EZ are gone? The SNT requires that you could have used one of these forms. Has anyone seen how the SNT rules will now be formulated?
This won't be a factor for students completing FAFSA until the FAFSA for the 2020-2021 academic year is released on October 1, 2019. The FAFSA folks will first need to see what kind of tax forms the IRS comes up with for tax year 2018, so there are several things that need to happen in sequence before your questions can be answered.

Topic Author
b0B
Posts: 513
Joined: Fri Oct 19, 2018 11:39 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Sat Oct 27, 2018 5:37 pm

Thanks everyone. It looks like the answers won't be known for a while. I'll wait and plan accordingly.

I have competing reasons for putting funds in tax-sheltered (I have plenty of space) or taxable (for access and flexibility), and all this FAFSA stuff is part of the calculation.

Calico
Posts: 320
Joined: Thu Jan 01, 2015 5:45 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by Calico » Mon Feb 04, 2019 9:13 am

I am curious about this too. I did a search for the topic and found nothing. Does anyone have any idea what the new rules will be for SNT starting in 2020-2021 since there are no more 1040As and 1040EZs? Literally, this thread is the first thing to pop up on a Google Search of the topic. Everything else is old information based on those old tax forms still being available.

Topic Author
b0B
Posts: 513
Joined: Fri Oct 19, 2018 11:39 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Sat Feb 09, 2019 5:32 pm

Calico wrote:
Mon Feb 04, 2019 9:13 am
I am curious about this too. I did a search for the topic and found nothing. Does anyone have any idea what the new rules will be for SNT starting in 2020-2021 since there are no more 1040As and 1040EZs? Literally, this thread is the first thing to pop up on a Google Search of the topic. Everything else is old information based on those old tax forms still being available.
Apparently information will come out in October, so I'll try to bump the thread then to find out the updates.

cshell2
Posts: 36
Joined: Thu May 09, 2019 10:29 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by cshell2 » Mon May 13, 2019 2:18 pm

For anyone still wondering about this. In the draft of the 2020-2021 FAFSA, the 1040A/1040EZ qualification for the SNT has been replaced by not having to file Schedule 1.

https://www.regulations.gov/document?D= ... -0039-0005

User avatar
teen persuasion
Posts: 784
Joined: Sun Oct 25, 2015 1:43 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by teen persuasion » Mon May 13, 2019 8:45 pm

cshell2 wrote:
Mon May 13, 2019 2:18 pm
For anyone still wondering about this. In the draft of the 2020-2021 FAFSA, the 1040A/1040EZ qualification for the SNT has been replaced by not having to file Schedule 1.

https://www.regulations.gov/document?D= ... -0039-0005
Thanks for the info.

We filed Schedule 1, but only entry was for educators expenses. That appeared on the old 1040A, so its not an equivalent test. Hmm. :annoyed

cshell2
Posts: 36
Joined: Thu May 09, 2019 10:29 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by cshell2 » Tue May 14, 2019 9:59 am

There are a several lines on the Schedule 1 that were included with the 1040A before. Deductible IRA and Alaskan Permanent Fund dividends are the two that jumped out at me.

There are still a couple weeks to make comments on the draft before they finalize things.

kmn99
Posts: 25
Joined: Mon Dec 03, 2018 7:09 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by kmn99 » Tue May 14, 2019 1:48 pm

1040A and 1040EZ were for Auto Zero EFC.

Do they still have Simplified Needs Test Or is it gone?

Previous criteria:

Eligibility for Simplified Versions of the FAFSA -

A dependent student qualifies for these simplified versions of the FAFSA if:
* The student’s parents satisfy income criteria. The parents’ adjusted gross income (AGI) must be less than $50,000 to qualify for the simplified needs test and less than or equal to $24,000 to qualify for auto-zero EFC. If the parents are not tax filers, income earned from work is substituted for AGI.
AND
* The student’s parents filed or were eligible to file an IRS Form 1040A or 1040EZ, filed an IRS Form 1040 but were not required to do so, or were not required to file an income tax return, or
* The student’s parent is a dislocated worker, or
* Anyone counted in household size on the FAFSA received certain means-tested federal benefits during either of the two previous calendar years. These benefits include Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Free and Reduced Price School Lunch, Temporary Assistance for Needy Families (TANF) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).


cshell2
Posts: 36
Joined: Thu May 09, 2019 10:29 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by cshell2 » Tue May 14, 2019 2:06 pm

kmn99 wrote:
Tue May 14, 2019 1:48 pm
1040A and 1040EZ were for Auto Zero EFC.

Do they still have Simplified Needs Test Or is it gone?
1040A and 1040EZ were used for both Simplified Needs and Auto Zero. Both still exist but the tax form qualifier has been changed. This is the statement from the Department of Education.

https://www.regulations.gov/contentStre ... ntType=pdf

Revisions as a result of the Tax Cuts and Jobs Act of 2017: In December 2017, President Trump signed into law the Tax Cuts and Jobs Act of 2017. This law made changes to the forms the Internal Revenue Service (IRS) provides to taxpayers to file their 2018 taxes. Since the 2020-21 FAFSA form requires income information from the 2018 tax year, adjustments to fafsa.gov and myFAFSA will be made to accommodate the new law.

The new tax law will require modifications to some FAFSA questions themselves, and those The new tax law will require modifications to some FAFSA questions themselves, and those
revisions are described in the 2020-21 Paper Enhancements Summary.

The changes outlined below are applicable to both fafsa.gov and myFAFSA:

➢ The IRS Data Retrieval Tool (DRT) filtering question asking whether a user has filed a Puerto Rican or Foreign Tax Return will be eliminated.
o Because the new tax law eliminates the 1040A and 1040EZ, the order in which we display the student and parent tax return type questions will change. Those questions will now display after the tax return status question and prior to the tax return filing status question in the corresponding financial sections (e.g., student and parent).
o Since we’re moving the type of tax return question, the answer to that question will be used to determine eligibility to use the DRT.
➢ The elimination of the 1040A and 1040EZ forms will require changes to how eligibility for an automatic zero EFC or simplified needs calculation is determined. This change requires a reordering of FAFSA questions. The new question asking whether a taxpayer has filed a Schedule 1 (which replaces the question asking whether a taxpayer was eligible to file a Form1040A/EZ) will now display before the dislocated worker question.
➢ The Untaxed Portions of IRA Distributions questions (45e & 94e) and the corresponding questions that ask if the user had a rollover and if so, how much, will be modified to include Untaxed Portions of Pensions. The Untaxed Portions of Pensions questions (45 f & 94f) and the corresponding rollover questions will be deleted.

kmn99
Posts: 25
Joined: Mon Dec 03, 2018 7:09 pm

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by kmn99 » Tue May 14, 2019 3:39 pm

Thank you

Post Reply