Which tax year will FAFSA use for Fall 2026 applications?
I'm planning ahead for my daughter who'll be starting college in Fall 2026. I'm trying to figure out which tax year will be used for her FAFSA application. I know they changed the rules recently with all the FAFSA Simplification stuff, and I want to make sure I understand exactly which year's taxes they'll look at when determining her aid package. If we'll be submitting the 2026-2027 FAFSA, does that mean they'll use our 2024 taxes? Or will it be 2025? I want to start planning our finances appropriately since we might have some flexibility with income timing in the relevant tax year. Thanks for any help!
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Diego Mendoza
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.
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Chloe Wilson
•Thank you! So even with all the FAFSA simplification changes, they're still using the prior-prior year approach? That's really helpful to know we should be focusing on our 2024 finances for planning purposes.
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Anastasia Romanov
its the taxes from 2 years b4 they start college so 2024 taxes for 2026 start date
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StellarSurfer
•Not exactly. It's the 2024 taxes for the 2026-2027 academic year, not just based on when they start. If someone starts mid-year in Spring 2027, they would still use the 2026-2027 FAFSA which uses 2024 taxes. The FAFSA is tied to the academic year, not the student's start date.
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Sean Kelly
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.
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Chloe Wilson
•This is really helpful! Do you know if investment income and capital gains are treated the same way as regular income for FAFSA purposes? We might have some stock sales in 2024 and I'm wondering if that could hurt her aid eligibility.
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Zara Malik
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!!
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Diego Mendoza
•While the SAI calculation has indeed replaced the EFC, and many aspects of the FAFSA have changed with the simplification initiative, the prior-prior year tax information rule has remained consistent. The 2026-2027 FAFSA will still use 2024 tax information. What has changed are things like the income protection allowances, how multiple students in college are counted, and certain questions being removed - not the base tax year used.
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Luca Greco
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.
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Nia Thompson
•Does that actually work? I've been trying to get thru to ask about my daughter's verification process for 3 weeks!!
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Luca Greco
•Yes, it did work for me! I was skeptical too but after trying for days to get through on my own, it was such a relief to finally speak with someone who could answer my specific questions about my twins' applications. Definitely better than waiting on hold for hours.
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StellarSurfer
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.
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Chloe Wilson
•Thank you! I didn't realize the parent contribution gets divided when multiple kids are in college. That's really good to know since my son might overlap with her for two years. Definitely changes our planning!
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Zara Malik
•NO! This is wrong information! The multiple-in-college discount was removed with the new FAFSA simplification! Parents' contribution does NOT get divided by number of students in college anymore with the new SAI formula. This changed with the 2023-2024 FAFSA revisions.
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StellarSurfer
•You're absolutely right, and I apologize for providing outdated information. With the FAFSA Simplification Act changes, the multiple-in-college adjustment for parent contributions was indeed eliminated. This means having multiple children in college simultaneously no longer automatically reduces each student's SAI the way it did with the old EFC calculation. Thank you for the correction.
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Sean Kelly
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.
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Anastasia Romanov
•couldnt they just do the stock stuff in a 529 plan? i think those don't count the same way on fafsa
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Sean Kelly
•529 plans are counted as parental assets (if the parent is the owner), not as income - so they have a much smaller impact on aid eligibility than realized capital gains that appear on your tax return. However, you'd still have to sell the stocks and realize the capital gains to put the proceeds into a 529, so that wouldn't solve the immediate capital gains issue unless done outside the FAFSA lookback period. Also, 529 withdrawals used for qualified education expenses aren't counted as income on the FAFSA, which is another benefit.
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Chloe Wilson
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!
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