We just discovered that qualified Roth IRA distributions (from prior contributions) count as untaxed "income" on the FAFSA (and I assume it also appears on a schedule somewhere on the 1040). This will lower our financial aid received next year, significantly.
My question is does the $6,000 contributed in January of 2020 partially offset the $10,000 withdrawn later during 2020 (i.e. will our untaxed income amount for 2020 be $10,000 or $4,000)?
Unfortunately, since I'm holding my return until TurboTax figures out how to work the $10,200 UI exemption into the program I don't think I can view how this will appear on my submitted 1040.
Thanks in advance for any insights.
