Confused about FAFSA 401K rollover to IRA reporting - qualified plan question

Good news! A 401k rollover to an IRA from last year shouldn't be reported on the 2025-2026 FAFSA. Those questions specifically refer to money moved BETWEEN retirement accounts during the tax year being reported. Retirement accounts are protected assets on the FAFSA, so your IRA doesn't count against your student's aid eligibility. Just make sure you don't report the rollover as income - that's a common mistake that can really hurt your SAI (Student Aid Index).

i made this EXACT mistake last yr when filling out my sons fafsa!!! reported my husbands 401k rollover as income and our SAI went thru the roof. took MONTHS to fix and almost lost his pell grant. dont do what i did lol

we had to do the correction form online and then when that didnt work we had to contact the financial aid office directly. they were ZERO help and kept telling us to call FSA directly. nightmare!

Let me clarify this with some exact FAFSA guidance since there seems to be confusion: 1. The "PENSION ROLLOVER INTO A QUALIFIED PLAN" refers to distributions from a pension plan that are rolled into another qualified retirement plan within the same tax year. 2. The "IRA ROLLOVER INTO ANOTHER QUALIFIED PLAN" refers to money moved from one IRA to another qualified retirement plan in the same tax year. In your case, if the rollover from 401k to IRA happened last year (2024), then it's not relevant for the 2025-2026 FAFSA which uses 2023 tax information. If it happened during your 2023 tax year, you should have received a 1099-R with a distribution code that indicates the rollover, and this amount should be excluded from your income on the FAFSA. Retirement accounts (including your IRA) are not reported as assets on the FAFSA. They're protected assets.

anyone else notice the new FAFSA is way more confusing than before??? like they said they were making it 'simpler' but i had to call my tax guy about the retirement stuff too!

It's specifically asking about rollovers that happened during the tax year being used for the FAFSA (for 2025-26, that's 2023). A qualified plan means any tax-advantaged retirement account like 401k, 403b, IRA, etc. If your rollover was in a different year than what's being reported on the FAFSA, it's irrelevant. Here's why it matters: rollovers can show up as distributions on tax forms, which might look like income to the FAFSA system if not properly identified. But retirement account balances themselves are NEVER reported on FAFSA as assets - they're excluded from the calculation completely. Key thing: if you did have a rollover in the tax year being reported, make sure to reduce your AGI by that amount when asked.

my brothers kid got their fafsa rejected cuz they put the wrong assets or something with retirement stuff. ended up having to appeal with the school financial aid office. total nightmare!!!

OK so just to wrap this up for anyone else with this question - here's what I learned: 1. 401k to IRA rollovers only matter for FAFSA if they happened in the tax year being reported (for 2025-26 FAFSA, that's 2023) 2. If your rollover was in a different year (like mine in 2024), you don't report it at all 3. Retirement accounts are protected assets and not reported on FAFSA 4. Be careful not to report rollover amounts as income or it can mess up your SAI calculation Thank you everyone for the help! One less FAFSA stress point.

Great summary from everyone! As someone who just went through this process with my daughter, I want to add one more tip: if you're unsure about ANY retirement-related questions on the FAFSA, it's worth consulting with your tax preparer or a financial aid advisor before submitting. The retirement account rules are one of the most commonly misunderstood areas, and getting it wrong can really impact your aid eligibility. Better to take an extra day to get it right than spend months trying to fix it later!

As a newcomer to FAFSA, this entire thread has been incredibly educational! I'm still trying to wrap my head around all the retirement account nuances. Quick question for the group - if I have a SEP-IRA from my small business, does that also fall under the "protected retirement assets" category that doesn't get reported? And what about if I made contributions to it during the tax year being reported - do those contributions need to be mentioned anywhere on the FAFSA? Thanks for creating such a helpful discussion thread!

This thread has been incredibly helpful! I'm going through the FAFSA process for the first time with my oldest child and the retirement questions had me completely stumped. I have a 403(b) from my teaching job and was panicking thinking I had to report the account balance somewhere. Reading through all these responses has been such a relief - I had no idea retirement accounts were protected assets. Thank you everyone for sharing your experiences and knowledge. It's so reassuring to know there's a supportive community here to help navigate these confusing forms!

Just wanted to jump in as someone who's new to the FAFSA process and say how incredibly helpful this entire discussion has been! I'm filling out my son's FAFSA for the first time and was completely overwhelmed by all the retirement account questions. Like many of you, I was worried about accidentally reporting something wrong and hurting his financial aid chances. Reading through everyone's experiences and explanations has given me so much confidence - especially learning that retirement accounts are protected assets and don't need to be reported. It's such a relief to find a community where people are willing to share their knowledge and help each other navigate these confusing forms. Thank you all for making this less scary for us FAFSA newcomers!

As another newcomer to the FAFSA world, this thread has been absolutely invaluable! I was in the exact same boat with retirement account confusion - I have both a traditional IRA and a Roth IRA from previous jobs, plus I did a 401k rollover a couple years back. I was stressing about whether any of this needed to be reported and potentially hurting my daughter's aid eligibility. It's such a relief to learn that retirement accounts are completely protected assets and don't get reported at all. The clarification about rollover timing (only matters if it happened in the tax year being reported) is huge too. Thank you everyone for sharing your experiences - it really helps to know other parents have navigated these same confusing waters successfully!

Hi everyone! I'm completely new to the FAFSA process and stumbled across this thread while frantically googling retirement account questions at 2am. This discussion has been such a game-changer for my understanding! I was literally sitting here with my husband's 401k statements wondering if I needed to report the balance somewhere and panicking that I'd accidentally sabotage my twin daughters' financial aid. Learning that ALL retirement accounts are protected assets - whether it's a 401k, IRA, 403b, or even SEP-IRA - is honestly life-changing information. I can't believe the official FAFSA instructions don't make this clearer! Also had no idea about the rollover timing rule (only report if it happened in the tax year being used). You've all saved me from what could have been a very costly mistake. Thank you for creating such a supportive space for us confused parents!

Hi everyone! I'm another newcomer to the FAFSA world and this thread has been absolutely incredible - thank you all for sharing your experiences and knowledge! I'm filling out my daughter's first FAFSA and was completely lost on the retirement account questions. I have a 401k from my current job and rolled over an old 401k into an IRA about two years ago. Reading through all your responses has been such a relief - I had no idea that retirement accounts were protected assets and don't need to be reported at all! The clarification about rollover timing (only matters for the specific tax year being reported) is huge too. I was so worried about accidentally hurting her financial aid eligibility by reporting something incorrectly. This community is amazing for helping nervous first-time FAFSA parents navigate these confusing forms. Thank you for making this process feel less overwhelming!

Hi everyone! I'm brand new to the FAFSA process and just wanted to say how incredibly helpful this entire discussion has been. I'm filling out my first FAFSA for my daughter and was completely panicking about the retirement account questions. I have a 403b from my nursing job and was convinced I had to report the balance somewhere, which was terrifying because I didn't want to accidentally hurt her chances at financial aid. Reading through all of your experiences and explanations has been such a huge relief - especially learning that ALL retirement accounts are protected assets that don't get reported on the FAFSA at all! The way everyone has broken down the rollover timing rules and shared their own mistakes and successes is invaluable for us newcomers. Thank you all for creating such a supportive community - you've turned what felt like an impossible maze into something actually manageable. This is exactly the kind of help first-time FAFSA parents need!

Hi everyone! I'm completely new to the FAFSA process and just discovered this thread while trying to figure out the retirement account questions - what a lifesaver! I'm filling out my son's first FAFSA and was totally confused about whether I needed to report my 401k balance or a rollover I did from a previous employer's plan into my current 401k about 18 months ago. Reading through all of your experiences has been incredibly reassuring! It's such a relief to learn that retirement accounts are protected assets and don't need to be reported, and that my rollover from 18 months ago isn't relevant since it wasn't in the 2023 tax year. I was so worried about accidentally sabotaging his financial aid eligibility by reporting something wrong. Thank you all for sharing your knowledge and creating such a supportive community for us nervous first-time FAFSA parents - you've made this whole process feel much less intimidating!