Do 2023 tax returns for 2025-2026 FAFSA need to include student Pell grants and scholarships?

You're right that the 2025-2026 FAFSA will use 2023 tax information, but you don't need to worry about reporting the Pell grant or scholarships as income on the FAFSA itself. The FAFSA is looking at your household income, not your son's financial aid.\n\nHowever, if your son reported the Pell grant as taxable income on his 2023 tax return (which is required for any portion used for expenses other than tuition, fees, books, and supplies), then that would be included as part of HIS income on the FAFSA. Scholarships follow the same rule - only the taxable portion would be considered.\n\nMost students don't report grants/scholarships as income unless they exceed qualified educational expenses.

Thank you! That makes sense. He didn't file a tax return for 2023 since he was still in high school and only working part-time during summer. So if I understand correctly, since these grants/scholarships weren't received until 2024, they won't affect our 2025-2026 FAFSA at all?

DONT LISTEN TO THAT ADVICE!!!! I made this EXACT mistake and it cost my daughter $5000 in aid!!! If your son received Pell and scholarships in 2023 AND used any of it for room and board, he ABSOLUTELY needed to file taxes and report that as income!!! The financial aid office will do verification and they WILL find this discrepancy!!

but the OP said the kid just started college this fall (2024), so they wouldn't have gotten any grants in 2023 while still in hs, right? so it doesn't affect anything for the 2025 fafsa?

Let me clarify a few things here to help with the confusion:\n\n1. The 2025-2026 FAFSA will use 2023 tax year information (the

This is SUCH a relief! Thank you for breaking it down so clearly. The FAFSA changes have been really confusing to navigate, and the financial aid officers at my son's college kept giving vague answers. I really appreciate everyone's help here.

same situation w/ my daughter last yr. the aid she got in 2024 doesnt affect the 2023 tax info for next years fafsa. but heads up if u need to call the fafsa ppl directly about anything (which i had to do 3 times for verification issues) use claimyr.com it saved me like 2hrs of waiting on hold. they have this cool demo video https://youtu.be/TbC8dZQWYNQ that shows how it works. worth it when ur dealing with the fsa people

Does that actually work? I spent 45 minutes on hold with FSA last month and then got disconnected right when someone picked up. Nearly threw my phone across the room lol

ya it actually does! they call and wait on hold for u then call u when a real person picks up. saved my sanity during the whole verification mess we went through

I think everyone is missing an important point here. While the Pell grants from 2024 won't impact your 2023 tax information for the 2025-2026 FAFSA, you DO need to report any pending financial aid on the new FAFSA when you list your son's current college enrollment. This is different from the old FAFSA.\n\nThe SAI calculation will take into account current financial aid awards, even if they weren't part of your 2023 tax situation. I learned this the hard way when my daughter's aid was reduced because we didn't properly report her current scholarships on the new FAFSA.

This isn't accurate for the 2025-2026 FAFSA. The Department of Education specifically removed the requirement to report other financial aid awards. The SAI calculation is based solely on the tax year information and family/student demographics. Current financial aid packages do not factor into the federal methodology for calculating aid eligibility.\n\nWhat you might be referring to is the CSS Profile, which some private colleges use in addition to the FAFSA, which does sometimes ask about current awards.

You're right - I was confusing the CSS Profile requirements with FAFSA. Thanks for correcting me! This stuff gets so complicated with all the changes.

my brother had this exact situation and we just went through all this!!! 2023 tax info is what matters for 2025-26 fafsa. anything from 2024 doesnt count. just make sure u save all ur sons 2023 w-2s if he had a job in high school tho bc thats what they'll want if u get selected for verification

Thank you! He did have a summer job in 2023, and I have his W-2 saved. It was only about $3,200 total income. Did your brother have to go through verification? Was it difficult?

yea they picked him randomly for verification and it was a HUGE pain! took like 6 weeks to process. make sure u upload the docs as soon as they ask for them. dont wait!!

One more thing to consider: while your son's 2024 Pell and scholarships don't impact the 2025-26 FAFSA, they might affect his 2024 taxes if some portion was used for non-qualified expenses (like room and board). \n\nIf he receives a 1098-T from his college for 2024, you should consult with a tax professional to determine if any portion of his scholarships/grants needs to be reported as income on his 2024 return. This won't affect the upcoming FAFSA, but it's still important for tax compliance.

That's a really good point I hadn't considered. I'll definitely keep this in mind when we file his 2024 taxes. Thank you for all the helpful information!

Just want to add another perspective as someone who works in financial aid - the confusion around the new FAFSA timeline is totally understandable! You're absolutely right that for 2025-2026, you'll use 2023 tax info, and since your son's grants/scholarships were received in 2024, they won't impact that FAFSA at all. One tip: when you do file the 2025-2026 FAFSA, make sure to double-check that you're entering your son's 2023 income correctly (from his summer job). A lot of families accidentally put $0 for student income when the student did work that year, which can trigger verification if the IRS data doesn't match. Also, keep all your 2023 tax documents organized - the new FAFSA pulls most info directly from the IRS, but you might still need them for verification or if there are any discrepancies. Good luck with the process!