Unlike FarmVille, where everything is “make believe” and doesn’t impact your actual net worth or adjusted gross income, the FAFSA does like to take these sort of items into consideration.

A couple of weeks ago, we talked about how assets from family farms are not factored into the FAFSA when the family materially participates in the operation of the farm. Since that article, I have received a few inquiries about the income side of farming and how (or if) that is reported on the FAFSA.

The following represents a question I got from a family and my answer is just below it. I hope this helps to provide guidance for other families. I am always up for a good challenge, so if you have other FAFSA questions, please do not hesitate to drop me a line.

FAFSA FARMING INCOME QUESTION:

My husband is 40% owner in a small family farming business which is actively participating in the growing, harvesting, packing & shipping of onions.  Their business is incorporated.  Our 2010 income, between the W2 & K form, looks as if it was quite high since we had to show 40% of the total income of the company as our own income.  However, we did not pocket all of that money.  My husband & his partner take a set salary each month.  The amount above and beyond his normal salary remains in the company.  Because of the incorporation, it looks as if my husband earned 40% of a rather large amount of money in 2010.  But the reality is, the majority of it never entered our hands.  How do we fill out the income portion of the FAFSA?  Is the amount beyond our actual W2 income amount considered a deductible amount since it actually isn’t part of our personal gross income? And how would we figure out what our adjusted family gross income would be?

ANSWER:

Unfortunately, you have to report the income from the farm when you are filling out your FAFSA.There really is no way around it. However, you can always follow up (appeal) with each of the financial aid offices and utilize a process called “professional judgment”. They may make some sort of concession and adjust your FAFSA results (EFC) on the back end.  Unfortunately though, based upon my experience and discussions with financial aid professionals, 90% of the situations like yours usually don’t get an adjustment.. But it never hurts to ask right?