What must students report regarding untaxed income on the FAFSA?

Students must report all forms of untaxed income on the FAFSA to ensure an accurate assessment of their financial situation. This includes various types of income that are not subject to federal income tax and may affect a student's eligibility for financial aid. Examples of untaxed income include contributions to retirement accounts, child support received, interest on tax-exempt bonds, and any forms of income from other sources that do not fall under taxable earnings.

Reporting all untaxed income is essential because it provides a comprehensive picture of the resources available to the student, allowing financial aid administrators to make informed decisions regarding the allocation of financial aid. By failing to report any untaxed income, students risk underreporting their financial resources, which could lead to improper aid calculations and potentially impact their access to necessary funding for their education.