Do I need to report parent's IRA distributions on 2024-25 TAP and FAFSA?

Yes, you DO need to report IRA distributions on both FAFSA and TAP applications. IRA distributions count as untaxed income for financial aid purposes, even if your father has retired. This is actually a common confusion point! For the 2024-25 FAFSA, you'll be using 2022 tax information, so if your father wasn't receiving distributions in 2022, you wouldn't report them. But for any distributions he received in the year that you're reporting on the FAFSA, they need to be included in the untaxed income section. For the NYS TAP application, you'll also need to report those distributions. The TAP application follows similar guidelines to FAFSA for income reporting, and retirement distributions are considered income for financial aid purposes.

My mom retired last yr and i didnt put her ira money on my fafsa bc my financial aid office said dont report retirement accounts!!! now im worried i did it wrong???

This is exactly why the new FAFSA system is SO frustrating!! The old form at least had clearer instructions about this stuff. For what it's worth, I was in a similar situation last year and ended up calling the NY State Higher Education office directly to confirm. They told me yes, report the distributions but not the account value itself.

Here's the definitive answer on IRA distributions for the 2024-25 FAFSA and TAP applications: 1. For FAFSA: You'll report financial information from the 2022 tax year. If your father didn't receive IRA distributions in 2022, you won't report them for this FAFSA cycle. 2. For NYS TAP: The 2024-25 TAP application also uses 2022 tax information, contrary to what some believe. TAP switched to using prior-prior year tax data along with FAFSA several years ago. If your father starts receiving distributions in 2023, these would be reported on your 2025-26 FAFSA and TAP applications. Important note: These distributions are typically reported on Line 4a of the IRS Form 1040. The taxable portion appears on Line 4b and the untaxed portion is the difference between Lines 4a and 4b. Both taxable and untaxed portions impact your aid eligibility.

kinda off topic but my parents refuse to giv me their financial info for FAFSA even tho im dependent and now i cant get any aid and im so stressed bc tuition is due nxt month and idk what to do :

Let me tell you from experience - the financial aid system is DESIGNED to be confusing about retirement income. When my husband retired, I reported his pension on my daughter's FAFSA and her EFC (now called SAI) jumped by $8000!!! The system basically punishes families who saved responsibly for retirement. It's complete BS that we're expected to drain retirement accounts for college when those same accounts are supposed to support us through our old age. Sorry for the rant but this makes me so angry every time I see these questions.

Thanks everyone for all the helpful responses! To summarize what I learned: 1. IRA distributions DO count as income for both FAFSA and TAP purposes 2. Both 2024-25 FAFSA and TAP use 2022 tax information 3. Since my dad wasn't receiving distributions in 2022, I don't need to report them on this year's applications 4. I'll need to report them next year (2025-26 applications) since he started receiving them in 2023 This community is amazing - I was really stressing about this!

Just wanted to add something that might help others - if your parent is doing Roth IRA distributions, the treatment can be different! With traditional IRAs, the entire distribution is usually taxable income that gets reported. But with Roth IRAs, if your parent is over 59½ and the account has been open for 5+ years, the distributions might be tax-free. However, even tax-free Roth distributions still need to be reported as untaxed income on FAFSA in some cases. It's worth double-checking with your school's financial aid office if you're dealing with Roth distributions specifically, since the rules can be tricky.

As a newcomer to this community, I just want to say thank you for such detailed and helpful responses! I'm currently a high school senior going through this process for the first time and honestly, the financial aid forms feel overwhelming. Reading through this thread has taught me so much about IRA distributions that I never would have known to ask about. My parents are still a few years away from retirement, but it's good to know what to expect down the road. One question I have - are there any other "hidden" income sources that people commonly forget to report on FAFSA? I want to make sure I don't miss anything important when I fill out my applications this fall.

As someone new to this community and currently navigating the FAFSA process myself, I just wanted to chime in with a quick tip that might help others. I found the IRS Data Retrieval Tool really helpful for ensuring I'm reporting the correct information from tax returns. It automatically pulls in the right figures from the IRS, which helps avoid manual entry errors when dealing with things like IRA distributions. For anyone who qualifies to use it, it can save a lot of time and reduce mistakes. Also, I've learned that keeping detailed notes about any unusual income situations (like the retirement distributions discussed here) can be really helpful if you get selected for verification later. The financial aid office will often ask for documentation to support what you reported, so having everything organized from the start makes that process much smoother!