Filing a joint return can hinder the application process for the Free Application for Federal Student Aid (FAFSA) if your parents or you and your spouse get separated or divorced. In these cases, the FAFSA may require you to include separate returns when completing the form.

But how do you calculate individual income from a joint return for the FAFSA? Find the answer here and learn how filing a joint tax return may impact your financial aid options.

Whose Income Do You Have To Report on the FAFSA?

If you’re a dependent student for FAFSA purposes, you have to include both parents’ income on the application form as long as they live together, regardless of whether they’re married, separated, or divorced. This way, your whole household income can be assessed to check your eligibility for financial aid. However, if your parents don’t live together (regardless of their marital status), you should only report the income of the parent who provided you with the most financial support during the last 12-month period.

You’re considered dependent if you’re an undergraduate student younger than 24 unless one of the following criteria applies to you: 

• You’re married
• You provide more than half of the support for dependents other than a spouse
• You’re an orphan or ward of the court
• You’re a veteran or active duty member of the U.S. Armed Forces

In this case, you’re an independent student, which means you should only report your and your spouse’s income (if you’re married).

What Does It Mean To File a Joint Return?

A joint tax return means that your parents (if you’re a dependent student) or you and your spouse (if you’re an independent student) have reported income using a joint tax form. This is typically a 1040 tax form, which combines both spouses’ income and reports the adjusted gross income as a single amount.

An easy way to enter joint tax information into the FAFSA form without searching for paperwork or manually calculating income tax is to use the IRS Data Retrieval Tool (DRT). This tool transfers tax return data directly into the FAFSA form, reducing errors and speeding up the application process.

How To Estimate Individual Income on a Joint Return

If you’re an independent student, you may need to subtract or add your current or former spouse’s income from a joint tax return for the 2024–25 FAFSA purposes if, after 2022, you:

• Became separated, divorced, or widowed
• Got married to a different person than the one you filed a joined return with
• Got married recently but filed a single return

You can calculate the estimated income on a joint tax return if you need to report income separately on the FAFSA by finding your or your spouse’s income on the employers’ W-2 forms. Anyone who’s either employed or on the payroll of a business has an individual W2 where you’ll find the precise income they earn from their job.

You can also find the yearly income through the tax return for the year the FAFSA applies to. This information should be among the first lines on the return under wages, salaries, and tips. Besides this, you may also review any other form that contains a list of your or your spouse’s annual earnings.

Your parents’ estimated income can be calculated in the same way if you’re a dependent student.

What if Someone Has Multiple W2s?

Someone may have multiple W2s if they’re employed in more than one place. In this case, you should add the amount under the wages, salaries, and tips line on the form to get their gross income.

You should also include any information related to farms, family-owned businesses, or other significant sources of income you or your parent have since these are also considered gross income. If you’re relying on W-2s or similar forms for income information, but you, your spouse, or your parents have a separate source of income, you must include that information as well.

How Does Filing a Joint Return Impact Your Financial Aid?

Some types of financial aid, such as Pell Grants or direct subsidized loans, are need-based, which means you have to demonstrate financial need to qualify for the aid. The less income and assets you report on the FAFSA, the more likely you are to receive need-based aid. 

If you’re a dependent student and your parents are separated or divorced, you may be able to get need-based aid in case your parents have filed taxes separately instead of jointly. This way, you only have to report the income of the parent who provided you with the most financial support in the last 12 months, which lowers your reported income. If both parents provided the same amount of support, you’re required to include the information of the parent with greater income.

Similarly, if you’re an independent student and are legally separated from your spouse, you don’t have to include their income and assets on the FAFSA. This may allow you to qualify for need-based financial aid you wouldn’t be able to get based on the adjusted gross income with your former spouse.

Which Financial Aid Options Aren’t Affected by Filing a Joint Return?

If you’re a dependent student whose parents are married or you’re an independent student and you’re married, you can still secure financial aid regardless of whether your/your parents’ return was filed jointly or separately. This type of aid is non-need-based, and it includes options like private loans and Direct PLUS loans. The latter offers two kinds of loans:

1. Parent PLUS—A Direct PLUS federal loan made to an eligible parent borrower
2. Grad PLUS—A Direct PLUS federal loan made to a professional or graduate student

While your tax return may not have an impact on obtaining Direct PLUS and private loans, your credit score is one of the factors considered to determine if you qualify for a loan. If your credit score doesn’t meet the lender’s standards, you’ll likely be denied the loan.

A great way to establish a good credit history early and ensure you can qualify for these loans is to subscribe to a credit building service like FreeKick. This platform lets children start building credit with the help of their parents as early as the age of 13.

FreeKick—Premium Credit Building and ID Protection

Provided by Austin Capital Bank, FreeKick is a subscription service and a deposit account that offers parent-sponsored credit building services for young adults and minors between the ages of 13 and 25 to help them establish a credit history. The platform also provides identity monitoring and protection services for the whole family, covering up to two adult parents and six children.

Start Building Credit Early With FreeKick

Starting your credit building journey early can potentially save you more than $200,000 during your lifetime since a good credit score increases your chances of securing favorable interest rates when applying for student loans and other financial services.

This is why FreeKick allows children as young as 13 to establish a strong history through parent-sponsored credit building. Here’s how to get started:

1. Create an Account—With your parent’s help, visit FreeKick.bank and choose a plan that fits your family’s needs and budget based on the deposit amount and annual fee tradeoff
2. Set It and Forget It—When the account is activated, FreeKick automatically starts building your credit over the next 12-month period
3. Keep Growing—When the first 12 months end, you can either renew the account and keep building credit or close it and get a refund of your initial deposit

Keep Your Identity Protected With FreeKick

Identity criminals can hinder the FAFSA process by using your tax information for fraudulent activities. They can also steal your personal data and use it to apply for financial aid, making your application invalid.

This is especially alarming when you take into account that a child’s identity is stolen every 30 seconds, and college students are among the most frequent victims of ID theft. 

To safeguard your tax information and other sensitive data, FreeKick offers comprehensive identity monitoring and protection features for both adults and minors:

FreeKick Pricing

Regardless of your family budget, FreeKick has a plan that fits your needs, and both available plans are FDIC-insured up to $250,000. Find more details in the table below:

Secure a solid financial future through credit building and protect yourself from identity theft—sign up for FreeKick today.

Freekick provides a double dose of financial empowerment and security for your whole family. It helps teens and young adults build strong credit profiles and offers identity motoring for up to two adult parents and six children under 25.

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