Reduced Income Guide & Form

Transcription

1 Office of Admission Carnegie Mellon University 5000 Forbes Avenue Pittsburgh, PA Phone: Fax: Reduced Income Guide & Form Carnegie Mellon University realizes that a student s financial circumstances may change from year to year. If you (independent students only - and your spouse, if applicable) or your parent(s) anticipate a reduction in income of at least 10 percent of your total taxable and untaxed income from 2015 to 2016, complete the attached Reduced Income Form and return it to the Office of Admission. GENERAL INFORMATION You have indicated on the CSS PROFILE that you have special circumstances that need to be considered or you have sent us a separate letter regarding reduced income. The attached Reduced Income Form allows you to explain your family s financial reduction in detail. Please provide the reason for the reduced income and the start date of the reduction. Once we review your form, we will notify you if there will be a change to your financial aid package. Estimates should be done carefully. After the 2016 calendar year, Carnegie Mellon will verify your projection by requesting that you submit your 2016 Federal Tax documents preferably by February 28, If your actual 2016 information is higher than your projection, we will recalculate your financial aid eligibility and notify you of any adjustments. We will carefully consider the information submitted, but this does NOT guarantee a revision to your financial aid eligibility. We may contact you to provide additional documentation. Please remember that we are reviewing both the taxable and untaxed income for the projected year. The projected income would be from January 1, 2016 through December 31, If your actual 2016 information is higher than your projection we will recalculate your financial aid eligibility and notify you of any adjustments. Completion of this form does not guarantee an adjustment to your need-based aid. The scheduled payment due date is still applicable regardless of whether this form has been processed. GUIDELINES FOR COMPLETING THE FORM 1. No item on the front or back of the form should be left blank. 2. Use zeros where applicable. 3. If an amount is negative, indicate loss with parentheses. 4. Only provide the calendar year amount - not monthly amounts. The items will correspond to an actual 2015 U.S. Federal Income Tax Return (IRS 1040 Form). 5. Parent(s) should make sure to report their UNTAXED income. The most common error is a failure to report tax-deferred compensation, which is the income you withheld from your earnings as part of your designated retirement funds, such as 401k or 403b contributions. You will find this untaxed income on the W-2 forms in Boxes 12a through 12d, codes D, E, F, G, H and S. 6. IRA withdrawals are considered to be taxable income regardless of whether it is used to pay off expenses and should be reported as part of your estimated income. 7. Projected taxes paid should be calculated using the IRS tax rate schedule at in order to determine your projected 2016 taxes paid as accurately as possible.

2 REQUIRED DOCUMENTATION Below is a list of acceptable documentation. Completed Reduced Income Forms submitted without acceptable documentation will not be processed. LOSS OF EMPLOYMENT OR CHANGES IN EMPLOYMENT STATUS Letters from your previous employer stating termination dates and 2016 earnings to date (on letterhead, signed and dated) OR Your most recent paystubs from current employers stating year-to-date earnings for 2016 (on letterhead, signed and dated) OR An unemployment recap showing amount of benefits received and the expected amounts to be received in If you are self-employed, please provide copies of all forms. DIVORCE OR SEPARATION Divorce - A copy of the divorce decree and proof that parents are residing at different addresses (copy of lease or utility bills). Separation - A copy of the legal separation document OR a signed statement from your attorney, showing the date of separation, and proof that parents are residing at different addresses (copy of lease or utility bills). DEATH OF PARENT OR SPOUSE A copy of the death certificate OR An obituary notice. INELIGIBLE CIRCUMSTANCES 1. Tuition paid for elementary or secondary private schooling. 2. Unusual expenses related to personal living (i.e., wedding expenses, VISA/Mastercard bills, home mortgages, school loan payments, car payments, other miscellaneous consumer expenses). 3. Families who had previously requested a re-evalution due to reduced income and underestimated their anticipated income. 4. Your Expected Family Contribution (EFC) is zero. Reduced Income Forms will NOT be processed if the acknowledgement is left blank. The forms need to be signed by both student and parent(s) OR student and spouse, if applicable. Return this form to the Office of Admission. Additionally, Reduced Income Forms will not be processed until the FAFSA and CSS PROFILE have been submitted electronically and all 2015 Income Tax Returns, including supporting schedules and W-2 forms, have been submitted directly to the IDOC service. Page 2 of 5

3 Reduced Income Form The reduced income process is designed to assist families who anticipate a reduction of at least 10 percent of their taxable and untaxed income from 2015 to Other circumstances resulting in a reduction of income will be reviewed on an individual basis. STUDENT SECTION Student s Name: Student s ID Number: BASIS FOR FILING REDUCED INCOME FORM Please select the basis for filing this reduction of income from the list of reasons below (check all that apply). Please note that you are required to submit supporting documentation. A list of acceptable documentation can be found in the Reduced Income Guide. A. Death of Parent (must have occurred ON OR AFTER January 1, 2016). NOTE: If you checked A, you must simply sign and return this form. You do not need to complete the remainder of this page. B. Permanent and total (unable to work again) disability of parent, or stepparent of the student (must have occurred ON OR AFTER January 1, 2016). C. Parent has retired; been unemployed or has experienced a change in employment status which will result in an income reduction ON OR AFTER January 1, D. Untaxed income has ceased or been reduced. Source: E. Separation or divorce. F. Other - You have experienced a reduction of income during 2015 or 2016 and one of the above situations does not define your circumstance. Please explain: Page 3 of 5

4 PROJECTED 2016 TAXABLE & UNTAXED INCOME PLEASE PROVIDE ITEMIZATION OF PROJECTED 2016 TAXABLE INCOME Enter the total projected gross taxable income (prior to deductions or exemptions) you or your spouse (independent) or your parent(s) expect to receive from January 1, 2016 through December 31, 2016, from each of the sources below. If none, enter zeros. If amount is negative, indicate loss with parentheses. Do not provide monthly amounts. The following items correspond to an actual 2015 U.S. Federal Income Tax Return. Dependent Students Only Independent Students Only TAXABLE INCOME FATHER/ STEPFATHER MOTHER/ STEPMOTHER SELF SPOUSE 1. Wages, salaries, tips 2. Taxable interest 3. Ordinary dividend income 4. Alimony received 5. Business income or (loss) 6. Capital gain or (loss) 7. Other gains or (losses) 8. IRA distributions: Does this include a Roth IRA? Yes No If yes, amount of Roth IRA $ 9. Pensions and annuities: 10. Rental Real Estate, Royalties, Partnerships, Trusts, S Corporations, etc. 11. Farm income or (loss) 12. Unemployment compensation 13. Social Security Benefits: 14. Other income: (i.e.: Taxable refund of state and local income taxes, severance pay, credits, foreign income exclusion, etc.) 15. Total Projected 2016 Taxable Income (Add 1 through 14 above.) = 16. IRS allowable adjustments to income: a. Include amounts here for IRA deduction and/or self-employed SEP, SIMPLE, and qualified plans _ b. Include amounts here for educator expenses; certain business expenses of reservists, performing artists, and fee-basis government officials; student loan interest deduction; tuition and fees deduction; health savings account deduction; _ moving expenses; one-half of self employment tax; self-employed health insurance deduction; penalty on early withdrawal of savings; alimony paid; and/or domestic production activities deduction 17. Projected 2016 Adjusted Gross Income (Subtract 16a + 16b from 15.) = 18. Expected 2016 Federal Taxes to be paid (not withheld) (Refer to IRS Guide) Page 4 of 5

5 PLEASE PROVIDE ITEMIZATION OF PROJECTED 2015 UNTAXED INCOME Enter the total projected gross untaxed income (prior to deductions or exemptions) you (and your spouse) or your parent(s) expect to receive from January 1, 2016 through December 31, 2016, from each of the sources below. Do not include any income reported on the reverse side. If none, enter zeros. Do not provide monthly amounts. Dependent Students Only Independent Students Only UNTAXED INCOME FATHER/ STEPFATHER MOTHER/ STEPMOTHER SELF SPOUSE 1. Payments to tax-deferred pension and savings plans (paid directly or withheld from earnings), including but not limited to, amounts reported on W-2 Forms in Boxes 12a through 12d, codes D, E, F, G, H and S 2. IRA deductions and payments to self-employed SEP, SIMPLE, Keogh and other qualified plans [from IRS Form total of lines or 1040A - line 17]. 3. Child support you received for all children. Do not include foster care or adoption payments. 4. Tax exempt interest income [from IRS Form line 8b or 1040A - line 8b]. 5. Untaxed portions of IRA distributions [IRS Form lines (15a minus 15b) or 1040A - lines (11a minus 11b). Exclude rollovers. If negative, enter a zero here.] 6. Untaxed portions of pensions [from IRS Form lines (16a minus 16b) or 1040A - lines (12a minus 12b). Exclude rollovers. If negative, enter a zero here.] 7. Housing, food and other living allowances paid to members of the military, clergy and others (including cash payments and cash value of benefits). Do not include the value of on-base military housing or the value of a basic military housing allowance. 8. Veterans noneducation benefits such as Disability, Death Pension or Dependency & Indemnity Compensation (DIC), and/or VA Educational Work-Study allowances. 9. Any other untaxed income not reported elsewhere on this form such as Workers Compensation, disability, etc. Also include the untaxed portions of health savings accounts from IRS Form line 25. Do not include student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, supplemental security income, Workforce Investment Act educational benefits, on-base military housing or military housing allowance, combat pay, or benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion or credit for federal tax on special fuels. 10. Money received or paid on your behalf, (e.g., bills) not reported elsewhere on this form. X X 11. Total Projected 2016 Untaxed Income (Add 1 through 16 above) ACKNOWLEDGEMENT We acknowledge that the information provided on this form is accurate to the best of our ability and that we have read the attached reduced income guide. We understand that our estimate has been done carefully and takes into account all the taxable and untaxable income. By signing this form, we agree to provide the actual 2016 information and understand that if the aid must be recalculated, we may owe the university. Student Signature: Spouse Signature: Parent Signature: NOTE: Please estimate carefully. After the 2016 calendar year, we will verify your projection by requesting that you submit your Actual 2016 Federal Tax documents to us by February 28, Return this form to: Office of Undergraduate Admission, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA Or fax to: Page 5 of 5