Which tax year will FAFSA use for Fall 2026 applications?

For the 2026-2027 academic year FAFSA, you'll need to report your 2024 tax information. The FAFSA always uses what's called "prior-prior year" tax data, which means they look back two years from the start of the academic year. This change was actually made several years ago to give families more time to complete the application with finalized tax information.

its the taxes from 2 years b4 they start college so 2024 taxes for 2026 start date

I just went through this with my son who's starting college this fall. For your daughter starting Fall 2026, you'll submit the 2026-2027 FAFSA using your 2024 tax information. This "prior-prior year" system is actually helpful because by the time you're filling out the FAFSA (which opens December 2025 for the 2026-2027 year), you'll have already filed your 2024 taxes long before. Makes the process much smoother since you can use the IRS Data Retrieval Tool to automatically pull in your tax information. One tip: If your income in 2024 will be significantly higher than normal, remember you can always submit an appeal for special circumstances to the financial aid offices after you get your aid offers. They can consider your more recent financial information in certain situations.

You guys are all forgetting that FAFSA is COMPLETELY DIFFERENT now!! The old rules don't apply anymore with the new Student Aid Index (SAI) calculation that replaced EFC. They totally changed how they look at income and assets. I'm pretty sure they're using different tax years now too!!

I'm trying to reach someone at Federal Student Aid to confirm some details about the 2026-2027 FAFSA for my twins, but I keep getting disconnected or waiting for hours. I finally used Claimyr (claimyr.com) last week and got through to a real person at FSA in under 15 minutes! They confirmed it will be 2024 taxes for the 2026-2027 FAFSA. They have a quick video showing how it works: https://youtu.be/TbC8dZQWYNQ - definitely worth checking out if you need to speak with someone directly.

To contribute some additional important information: for the 2026-2027 FAFSA (using 2024 taxes), remember that capital gains, dividends, and interest from investments ARE counted as part of your income in the SAI formula. However, the value of retirement accounts (401k, IRA, etc.) is NOT counted as an asset on the FAFSA. Also, if you're planning ahead, remember that the parent contribution is divided by the number of family members in college. So if you have another child who will be in college simultaneously with your daughter, that could significantly improve her aid eligibility.

Regarding your question about capital gains - yes, they count as income on the FAFSA using the prior-prior year approach. So large capital gains in 2024 could potentially impact aid eligibility for the 2026-2027 academic year. If you're in a position to time your stock sales strategically, you might consider either: 1. Accelerating them into 2023 (before the FAFSA "lookback" period) 2. Delaying them until 2025 or later (after the first FAFSA is filed) Remember that for subsequent years of college, you'll need to file a new FAFSA each year, and the tax year used will advance accordingly. So for your daughter's sophomore year (2027-2028), they'll use 2025 tax information.

Thank you all so much for the helpful information! To summarize what I've learned: 1. For my daughter starting Fall 2026, we'll use our 2024 tax information on the 2026-2027 FAFSA 2. Capital gains in 2024 will count as income and could impact aid eligibility 3. The multiple-in-college discount no longer exists with the new SAI formula 4. We should consider timing our stock sales outside of the 2024 tax year if possible 5. For subsequent years, the tax year used will advance accordingly This gives us a much clearer picture for planning. Really appreciate everyone's insights!

You've got a great summary there! One additional tip since you're planning ahead: consider keeping detailed records of any unusual income or expenses in 2024 that might not reflect your typical financial situation. Things like one-time bonuses, job changes, medical expenses, or unemployment can all be documented for potential appeals later if needed. Also, since you mentioned having some flexibility with income timing, remember that the FAFSA looks at Adjusted Gross Income (AGI) from your tax return, so strategies that reduce your AGI (like maximizing 401k contributions, HSA contributions, or traditional IRA contributions in 2024) could be beneficial for aid purposes. Just make sure any financial moves align with your overall financial goals, not just FAFSA optimization!

Great thread! As someone who just went through this process, I wanted to add one more planning consideration: if you're self-employed or have variable income, the prior-prior year system can work either for or against you. Since you're using 2024 taxes for the 2026-2027 FAFSA, if 2024 ends up being a particularly high income year for your business or investments, but you expect 2025-2026 to be more typical, you can always request a professional judgment review from the financial aid office. They can consider more recent income information and adjust your aid package accordingly. The key is having good documentation of the income change and being able to demonstrate that 2024 was an anomaly rather than your new normal income level. This flexibility has helped many families I know get more realistic aid packages!