Expert: Andrew Youngker - 1/29/2011

Question
I am able to claim my daughter on my taxes every other year. Last year she started college and was awarded a Pell Grant. She used her mother's income ($0)for the application. Will my claiming her on my taxes affect her grants, past and future?

Answer
The short answer to the question is "yes". According to all the legal garb, you do have to be truthful on the application in case a verification (kind of like a audit). The parent that is supposed to fill out the FAFSA is the one that the student spent most of the previous 12 months with or the one that provides the most financial support during the previous 12 months. If I someone to audit your situation, I would say that how could a college student be supported by an adult that has a $0 income. That would point me to any other parent that is still living.

Anytime the income level goes up on the FAFSA so does the potential that a Pell grant could be changed. The grant will only go down if the EFC crosses the schools threshold for giving out need based money.

For specific information about your situation, talk with a financial aid counselor at the school. They would be able to direct you in the correct direction based upon your unique situation. They would also be able to tell you what their cut off is for the EFC.

Another thing to consider is that since the mother has a $0 income, where is the other support coming from. Stepparents married to the parent that is filling out the FAFSA must also claim their income for the purposes of financial aid. This includes even if the couple file their taxes separatly. It has to do with the income within the house.

Good luck and talk to the counselor at the school to set things straight before a fraud case comes your way. Free money is great, but at the risk of legal matters.