FAFSA Pension Rollover Reporting Question - IRA Form 1040 Line 5a/5b Confusion

You should report ZERO on the FAFSA for this. When you do a rollover from one qualified retirement plan to another (like 401k to IRA), it's not considered income for financial aid purposes. The FAFSA is looking for actual distributions/income, not rollovers. This is actually a common area of confusion. Even though your 1040 shows the amount on line 5a, since line 5b is zero (meaning it wasn't taxable), the FAFSA doesn't want you to report it. The FAFSA instructions specifically exclude rollovers from untaxed income reporting.

WATCH OUT!!!! I made this exact mistake last year and it cost my daughter thousands in aid!!! I reported our rollover amount ($42K) and it counted as income even though it wasn't! Our SAI was way higher than it should have been. The financial aid office said it happens all the time but wouldn't fix it afterwards. Check the box that says it was a rollover AND put zero as the amount.

Wait im confused... isnt line 5a the distribution amount and 5b is the taxable amount? So if its tax free shouldnt u report whats on line 5a anyways? thats what we did and it was fine

The correct answer is to report ZERO for this rollover. I work with financial aid applications regularly, and here's what you need to know: 1. FAFSA excludes rollovers from untaxed income calculations 2. When completing the FAFSA, there's now a specific question asking if the pension/IRA distribution was a rollover 3. Answer "Yes" to the rollover question and enter zero for the amount 4. The key is that rollovers aren't new income - just transfers between retirement accounts If you report the line 5a amount, your Student Aid Index (SAI) will be artificially inflated, potentially reducing aid eligibility significantly.

I had so many problems with FAFSA last year I almost gave up! Waited on hold for 3 hours trying to get help with a similar issue and never even got through to anyone. The website is so confusing and the instructions dont make any sense. Good luck!

Update: I went back into the application and found the checkbox for rollover! It was in a different section than I expected. I marked "Yes" for the rollover question and entered zero as the amount. Thanks everyone for your help - I feel much more confident now that I'm reporting it correctly.

This whole FAFSA system is RIDICULOUS!!! Why make something so complicated?? I swear they design it to confuse people so fewer students get aid. My daughter got denied aid because of some stupid form error we made, and good luck getting anyone on the phone to fix it. This new 2025-2026 FAFSA is supposedly "simpler" but it's still a disaster.

I actually made same error last yr & called the support # after submitting with wrong info. They said just leave incorrect & explain to each college financial aid office directly. So I did that & most schools fixed it manually when calculating their packages. Worth trying if u already submit with wrong info!

As someone who just went through this exact situation with my daughter's FAFSA, I can confirm what others have said - definitely report ZERO for the rollover amount! I was so confused initially because seeing that $68,500 on line 5a made me think it was income, but it's not. The key thing to remember is that a rollover is just moving money from one retirement account to another - you're not actually receiving any new income. I made the mistake of calling the FAFSA helpline first and got conflicting information from different representatives, which made me even more confused. What finally helped was speaking directly with the financial aid office at my daughter's college. They explained that rollovers are specifically excluded from the FAFSA income calculations, and there's actually a question that asks if the distribution was a rollover - make sure to answer "Yes" to that and then enter zero for the amount. The good news is that even if you make a mistake on this, most college financial aid offices are familiar with this common error and can manually adjust your aid calculation. But definitely better to get it right from the start! Good luck with your son's application.

I'm so glad you found this community for help! I went through the exact same confusion last year with my daughter's FAFSA. The rollover reporting is definitely one of the most confusing parts of the application. Just to reinforce what everyone else has said - you absolutely should report ZERO for the rollover amount. I initially panicked seeing the large amount on line 5a of our tax return and almost reported it as income, which would have been a huge mistake. The way I think about it now is: if you didn't actually receive any money in your pocket (which you didn't with a rollover), then it's not income for FAFSA purposes. The money just moved from one retirement account to another - no new income was created. One tip that helped me: when you get to that section of the FAFSA, take your time and read each question carefully. The rollover checkbox is easy to miss if you're rushing through. And don't hesitate to reach out to your son's college financial aid office if you have any doubts - they're usually very helpful with these common questions. You're doing great by asking for help before submitting. That's exactly the right approach!

I'm a newcomer to this community and just wanted to say how helpful this thread has been! I'm actually dealing with a similar situation right now - my husband did a 403(b) rollover to an IRA last year and I was completely confused about how to report it on our daughter's FAFSA. Reading through everyone's responses here has been so much clearer than the official FAFSA instructions. The key points I'm taking away are: 1) Report ZERO for the rollover amount, 2) Make sure to check "Yes" when asked if it was a rollover, and 3) Don't let the line 5a amount on the tax return fool you into thinking it's income. It's honestly ridiculous that something this common isn't explained more clearly in the FAFSA itself. Thank you all for sharing your experiences - it's saving me from making a costly mistake!

Welcome to the community! As another newcomer who just went through this exact same rollover confusion, I can't thank everyone enough for this thread. I was literally sitting here at 2am stressing about whether to report my 401k rollover amount ($45,000 on line 5a, $0 on line 5b) when I found this discussion. The clarity you've all provided is incredible - report ZERO, check YES for rollover, and don't let that line 5a amount trick you into thinking it's income. It's such a relief to know I'm not the only parent who found the FAFSA instructions completely confusing on this point. What really struck me is how many people have made this mistake and had it impact their aid calculations. It makes me wonder how many families out there are getting less aid than they deserve simply because this isn't explained clearly. Thank you all for taking the time to share your experiences - you're literally saving other families thousands of dollars in potential aid!

Welcome to the community! I'm also new here and just discovered this incredibly helpful thread while dealing with the exact same rollover reporting dilemma. Like so many others, I was completely baffled by how to handle my IRA rollover on the FAFSA - seeing that large amount on line 5a but zero on 5b had me second-guessing everything. Reading through everyone's experiences has been such a relief! The consensus is crystal clear: report ZERO for the rollover amount and make sure to check YES when asked if it was a rollover. It's reassuring to know this confusion is so common - makes me feel less alone in struggling with these poorly written instructions. What really stands out to me is how generous everyone has been with sharing their mistakes and successes. The warnings about how reporting the rollover incorrectly can inflate your Student Aid Index and reduce aid eligibility are so valuable. Thank you all for creating such a supportive environment where newcomers like me can get the clarity we desperately need!

Welcome to the community! I'm also new here and just stumbled upon this thread while dealing with my own FAFSA rollover nightmare. Like everyone else, I was completely confused about how to report my husband's 403(b) to IRA rollover ($73,000 on line 5a, $0 on 5b) for our daughter's application. This discussion has been absolutely invaluable! The clear consensus from everyone's experiences is: report ZERO for the rollover amount and check YES when asked if it was a rollover. I was literally about to make the same costly mistake that Savannah mentioned - reporting the full rollover amount as income, which would have artificially inflated our Student Aid Index. What strikes me most is how many families are struggling with this exact same issue. The FAFSA instructions are clearly inadequate if this many parents are seeking help at all hours trying to figure out something that should be straightforward. Thank you to everyone who shared their experiences - you're preventing so many of us from making expensive errors that could impact our children's financial aid eligibility!

Welcome to the community! I'm also a newcomer here and just found this incredibly helpful discussion while struggling with my own FAFSA rollover confusion at 1am. Like so many others, I was completely puzzled about how to report my 401k to IRA rollover ($55,000 on line 5a, $0 on line 5b) on my daughter's financial aid application. This thread has been absolutely lifesaving! The clear guidance from everyone's experiences is: report ZERO for the rollover amount and make sure to check YES when the FAFSA asks if it was a rollover. I was literally seconds away from reporting that $55,000 as income, which would have been catastrophic for our aid eligibility based on what others have shared about inflated Student Aid Index calculations. What really amazes me is seeing how many parents are dealing with this exact same confusion - clearly the FAFSA instructions need major improvement if this many families are searching for help with rollovers! The generosity of everyone sharing their mistakes and successes is incredible. Thank you to all the experienced members who've taken time to explain this properly - you're preventing so many costly errors and helping ensure our kids get the financial aid they deserve. This community is exactly what confused parents like us need!

Welcome to the community! I'm also a newcomer here and just discovered this incredibly helpful thread while struggling with my own FAFSA rollover confusion late tonight. Like so many others have mentioned, I was completely baffled about how to report my husband's 401k to IRA rollover ($42,000 on line 5a, $0 on line 5b) on our son's financial aid application. This discussion has been absolutely invaluable! The unanimous guidance from everyone's experiences is crystal clear: report ZERO for the rollover amount and make sure to check YES when the FAFSA asks if it was a rollover. I was honestly on the verge of reporting that $42,000 as income, which would have been a huge mistake based on all the warnings about inflated Student Aid Index calculations. What really strikes me is how many newcomers are dealing with this identical confusion - it's both comforting to know I'm not alone and frustrating that the FAFSA instructions are so unclear on such a common situation. The generosity of experienced members sharing their mistakes and successes is truly remarkable. Thank you to everyone who's contributed to this discussion - you're literally preventing families from making costly errors that could impact their children's financial aid eligibility. This community is exactly what confused parents like us need during this stressful process!

Welcome to the community! I'm also a newcomer here and just found this incredibly helpful thread while dealing with my own FAFSA rollover confusion at 1:30am. Like so many others have shared, I was completely puzzled about how to report my 403(b) to IRA rollover ($58,000 on line 5a, $0 on line 5b) on my twin daughters' financial aid applications. This discussion has been absolutely essential! The clear consensus from everyone's experiences is: report ZERO for the rollover amount and make sure to check YES when the FAFSA asks if it was a rollover. I was literally about to report that $58,000 as income, which would have been catastrophic for our aid eligibility based on all the warnings about artificially inflated Student Aid Index calculations. What really amazes me is seeing how many newcomers like us are dealing with this exact same confusion - it's both reassuring and frustrating that the FAFSA instructions are so inadequate for such a common retirement planning situation. The willingness of experienced community members to share their hard-earned knowledge and costly mistakes is truly incredible. Thank you to everyone who's contributed to this discussion - you're genuinely saving families from making expensive errors that could significantly impact their children's financial aid eligibility. This supportive community is exactly what overwhelmed parents like us need when navigating these confusing applications. Now I can finally submit both daughters' FAFSAs with confidence knowing we won't be penalized for our retirement rollover!

Welcome to the community! I'm also a newcomer here and just found this thread while frantically searching for help with my FAFSA rollover question at midnight. Like so many others, I was completely confused about how to report my husband's 401(k) to IRA rollover ($52,500 on line 5a, $0 on line 5b) on our daughter's financial aid application. This entire discussion has been incredibly enlightening! The consistent advice from everyone's experiences is crystal clear: report ZERO for the rollover amount and make sure to check YES when the FAFSA asks if it was a rollover. I was literally about to make that same costly mistake of reporting the full amount as income before discovering this thread - thank goodness I found it in time! What really stands out to me is how many newcomers are dealing with this exact same confusion at all hours of the night. It's both reassuring to know I'm not alone and concerning that the FAFSA instructions are so unclear on something this common. The generosity of experienced members sharing their knowledge and mistakes is truly remarkable - you're preventing so many families from making errors that could significantly reduce their children's aid eligibility. Thank you to everyone who's contributed to making this such a supportive space for confused parents like us. Reading about how incorrectly reporting rollovers can artificially inflate the Student Aid Index really drove home how critical it is to get this right. Now I can finally complete our application with confidence knowing we won't be penalized for our retirement planning decisions!

Welcome to the community! I'm also a newcomer here and just discovered this incredibly helpful thread while struggling with my own FAFSA rollover confusion at 2:30am. Like so many others have shared, I was completely baffled about how to report my 401(k) to IRA rollover ($41,200 on line 5a, $0 on line 5b) on my son's financial aid application. This discussion has been absolutely invaluable! The clear consensus from everyone's experiences is: report ZERO for the rollover amount and make sure to check YES when the FAFSA asks if it was a rollover. I was literally about to make that same devastating mistake of reporting the full amount as income before stumbling upon this thread - thank goodness for this community! What really strikes me is how many newcomers like us are here at various hours dealing with this identical confusion. It's both comforting to know we're not alone and frustrating that something this common isn't explained clearly in the FAFSA instructions. The willingness of experienced members to share their knowledge and costly mistakes is truly remarkable - you're literally preventing families from making errors that could significantly impact their children's aid eligibility. Thank you to everyone who's made this such a supportive space for overwhelmed parents navigating this confusing process. Reading about how incorrectly reporting rollovers can artificially inflate the Student Aid Index really opened my eyes to how critical accuracy is here. Now I can finally complete our application with confidence knowing we won't be penalized for our retirement planning decisions!