Dear Tax Talk,
My granddaughter will be starting 11th grade in a couple of weeks and will be taking the PSAT, SATs and ACTs during the school year. She will be applying to colleges in the fall of 2013. She is a gifted child and has had straight As all through school and will need to apply for financial aid.
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My daughter receives about $275 in welfare and some $700 in food stamps for herself and her four children in Alabama. She has not paid any income tax for the last two years because she has no other income. I believe one must submit an income tax return when applying for financial aid. My question is: Should she submit an income tax return for 2012 and 2013 to have on hand for the aid request, even though she has no other income? I want to make sure she does everything correctly. Thank you so much for any help you can give me.
Don't worry for your granddaughter. When the time comes, she will just submit a statement from her mom that she is not required to file a federal tax return. The financial aid office will ask your daughter to submit form 4506-T to verify that there is no tax return submission for the year.
Your daughter is not required to file an income tax return, as her sources of income are not taxable. Internal Revenue Service Publication 501 provides guidance on who is required to file and at what level of income. The thresholds for filing change each year, as they are indexed for inflation.
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