For divorced parents, figuring out who is the custodial parent for FAFSA filing purposes can be a little confusing. Actually, the rules are pretty simple: the custodial parent is the one with whom the student spends the most time. That’s not necessarily the parent named custodial parent in the divorce decree, or the one claiming the student on their tax return.
For parents who share custody, it can be worth figuring out if it’s more beneficial to have one or the other be the custodial parent. Of course this only works if both parents can reasonably make the case that the student slept at their house at least 183 nights last year. Before instantly deciding that the lower-earning parent is the best choice for the FAFSA, look at all the income streams going to both parents and all the college resources to make sure you aren’t shooting yourself in the foot.
For example:
- Is alimony or child support being paid? If so, the recipient reports both of those as income, which often evens things out.
- Does the non-custodial parent own the student’s 529 accounts? If so, the student reports those withdrawals as student income.
- Is either ex remarried? If so, the new spouse’s income is also reported.
Divorced parents should also consider whether one or both are eligible for the AOTC ($80,000 MAGI for single filers; $160,000 for married filing joint). If so, it may be most beneficial for the eligible parent to claim the student on their tax return during college years.
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This information is really helpful
I am divorced and we are not living together. My son lives with her and used her on his fafsa. However, this is my year to claim him on my taxes. Can I also claim the AOTC and if so, would it affect who’s income gets used for fafsa?
Hi, this is a good (and frequently-asked) question. The custodial parent for FAFSA purposes does not need to be the same parent claiming the student as a dependent on their taxes, nor does anything specified in the divorce decree have anything to do with it. So yes, you can claim your student and get the AOTC and your ex can do the FAFSA.
Question: I have joint custody and mandated physical custody of my graddaughter. The father is dead and his death benefit will end when she turns 18. The mother is a drug addict and the only reason rights were not terminated was she was suicidal and making her agree would have been a death nell. Court mandated she stay with me. She has not been in contact for over ten years. How so we handle fafsa next year?
You would be the custodian for the FAFSA. Clearly your granddaughter has a lot of special circumstances, not all of which will be captured in the FAFSA or CSS Profile including the end of her benefits. It may be that she will need to appeal financial aid awards, which is a pretty normal process where you explain why and how your circumstances are different from what the aid forms indicate.
My Ex and I share custody but my son only stays with me every other weekend, so nowhere near 183 nights a year.
Between us I make a lot less money. I claim my son on my taxes. Can I file his FAFSA under my name and income?
The custodial parent currently is the one with whom the student spends the most time. That being said, no one asks for a sleep log or any documentation of that so as long as you could make a reasonable case that your student spends equal amounts of time with both– for example, that you both live within the school district or at least close enough that he could attend school from either house– you could. However, next year the FAFSA will require the parent providing the most financial support to be the custodial parent. In this case it would depend on whether either of you is paying/receiving child support or if there is unequal sharing of your son’s costs.