20 U.S.C. § 1087ss : US Code - Section 1087SS: Simplified needs test

Search 20 U.S.C. § 1087ss : US Code - Section 1087SS: Simplified needs test

(a) Simplified application section
(1) In general
The Secretary shall develop and use an easily identifiable
simplified application section as part of the common financial
reporting form prescribed under section 1090(a) of this title for
families described in subsections (b) and (c) of this section.
(2) Reduced data requirements
The simplified application form shall -
(A) in the case of a family meeting the requirements of
subsection (b)(1) of this section, permit such family to submit
only the data elements required under subsection (b)(2) of this
section for the purposes of establishing eligibility for
student financial aid under this part; and
(B) in the case of a family meeting the requirements of
subsection (c) of this section, permit such family to be
treated as having an expected family contribution equal to zero
for purposes of establishing such eligibility and to submit
only the data elements required to make a determination under
subsection (c) of this section.
(b) Simplified needs test
(1) Eligibility
An applicant is eligible to file a simplified form containing
the elements required by paragraph (2) if -
(A) in the case of an applicant who is a dependent student -
(i) the student's parents file or are eligible to file a
form described in paragraph (3) or certify that they are not
required to file an income tax return and the student files
or is eligible to file such a form or certifies that the
student is not required to file an income tax return; and
(ii) the total adjusted gross income of the parents
(excluding any income of the dependent student) is less than
$50,000; or
(B) in the case of an applicant who is an independent student
-
(i) the student (and the student's spouse, if any) files or
is eligible to file a form described in paragraph (3) or
certifies that the student (and the student's spouse, if any)
is not required to file an income tax return; and
(ii) the adjusted gross income of the student (and the
student's spouse, if any) is less than $50,000.
(2) Simplified test elements
The six elements to be used for the simplified needs analysis
are -
(A) adjusted gross income,
(B) Federal taxes paid,
(C) untaxed income and benefits,
(D) the number of family members,
(E) the number of family members in postsecondary education,
and
(F) an allowance (A) for State and other taxes, as defined in
section 1087oo(c)(2) of this title for dependent students and
in section 1087qq(b)(2) of this title for independent students
with dependents other than a spouse, or (B) for State and other
income taxes, as defined in section 1087pp(b)(2) of this title
for independent students without dependents other than a
spouse.
(3) Qualifying forms
A student or family files a form described in this subsection,
or subsection (c) of this section, as the case may be, if the
student or family, respectively, files -
(A) a form 1040A or 1040EZ (including any prepared or
electronic version of such form) required pursuant to title 26;
(B) a form 1040 (including any prepared or electronic version
of such form) required pursuant to title 26, except that such
form shall be considered a qualifying form only if the student
or family files such form in order to take a tax credit under
section 25A of title 26, and would otherwise be eligible to
file a form described in subparagraph (A); or
(C) an income tax return (including any prepared or
electronic version of such return) required pursuant to the tax
code of the Commonwealth of Puerto Rico, Guam, American Samoa,
the Virgin Islands, the Republic of the Marshall Islands, the
Federated States of Micronesia, or Palau.
(c) Zero expected family contribution
The Secretary shall consider an applicant to have an expected
family contribution equal to zero if -
(1) in the case of a dependent student -
(A) the student's parents file, or are eligible to file, a
form described in subsection (b)(3) of this section, or certify
that the parents are not required to file an income tax return
and the student files, or is eligible to file, such a form, or
certifies that the student is not required to file an income
tax return; and
(B) the sum of the adjusted gross income of the parents is
less than or equal to the maximum amount of income (rounded
annually to the nearest thousand dollars) that may be earned in
1992 or the current year, whichever is higher, in order to
claim the maximum Federal earned income credit; or
(2) in the case of an independent student with dependents other
than a spouse -
(A) the student (and the student's spouse, if any) files, or
is eligible to file, a form described in subsection (b)(3) of
this section, or certifies that the student (and the student's
spouse, if any) is not required to file an income tax return;
and
(B) the sum of the adjusted gross income of the student and
spouse (if appropriate) is less than or equal to the maximum
amount of income (rounded annually to the nearest thousand
dollars) that may be earned in 1992 or the current year,
whichever is higher, in order to claim the maximum Federal
earned income credit.
An individual is not required to qualify or file for the earned
income credit in order to be eligible under this subsection.