FAFSA and Roth Withdrawals
Does a $30,000 Roth withdrawal need to be reported on FAFSA forms if it is not rolled over into another qualifying account? For an older single parent earning $36,000 from Social Security and about $10,000 from a small part time business, is there a possibility of tripping over the poverty limit and thereby lessening the benefits being received for a college student if these funds are used (for parental needs, not the student’s)?
Terry Says
Whew — I had to turn to the real expert — Mark Kantrowicz– who writes for SavingforCollege.com.
I wouldn’t have known this, but the answer, though complicated, is that yes, Roth withdrawals do count in the FAFSA! Please read his article for details:
https://www.savingforcollege.com/article/how-do-distributions-from-a-roth-ira-affect-the-fafsa
