Sec. 5. Definitions of total income and assets
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Section 480(a)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087vv(a)(1) ) is amended to read as follows: Except as provided in paragraph (2), the term total income is equal to— in the case of an individual who has not filed, and is not required to file, any Federal tax return or in the case of a qualified recipient of a means-tested Federal benefits program, as defined in section 473(b)(3)(B), earned income for the second preceding tax year minus excludable income (as defined in subsection (e)); in the case of an individual who filed a Federal form 1040EZ, 1040A, or 1040 with no forms or schedules, adjusted gross income plus untaxed income and benefits for the second preceding tax year minus excludable income (as defined in subsection (e)); and in the case of an individual who filed a Federal form 1040 with forms or schedules or in the case of an individual who filed a foreign tax return in lieu of a Federal tax return, adjusted gross income plus untaxed income and benefits for the second preceding fiscal tax year minus excludable income (as defined in subsection (e)). .
Section 480(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1087vv(a) ) is amended— by moving paragraph
(2)two ems to the right; and in paragraph (2), by striking No portion and inserting the following: . Amounts not included .—No portion Section 480(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1087vv(b) ) is amended to read as follows: The term untaxed income and benefits means— the aggregate amount of losses taken into account for determining adjusted gross income on Federal form 1040; the amount of any tax-exempt interest income reported on Federal form 1040; and amounts of foreign income excluded from adjusted gross income and reported on Federal form 2555. . Section 480(e) of the Higher Education Act of 1965 ( 20 U.S.C. 1087vv(e) ) is amended to read as follows: The term excludable income means— any student financial assistance awarded based on need as determined in accordance with the provisions of this part, including any income earned from work under part C of this title; and payments made and services provided under part E of title IV of the Social Security Act ( 42 U.S.C. 670 et seq.) to or on behalf of any child or youth over whom the State agency has responsibility for placement, care, or supervision, including the value of vouchers for education and training and amounts expended for room and board for youth who are not in foster care but are receiving services under section 477 of such Act ( 42 U.S.C. 677 ). . Section 480(f)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087vv(f)(1) ) is amended by striking The term and all that follows through the period at the end and inserting the following: In determining the value of assets in a determination of need under this title— in the case of an individual who has not filed, and is not required to file, any Federal tax return or in the case of a qualified recipient of a means-tested Federal benefits program, as defined in section 473(b)(3)(B), the individual's assets shall be considered to be equal to zero; and in the case of a parent of a dependent student or in the case of an independent student with dependents other than a spouse, the individual's assets shall be considered to be equal to zero if that parent or independent student filed a Federal form 1040EZ, 1040A, or 1040 with no forms or schedules. In the case of an individual who filed a form 1040 with forms or schedules, the term assets means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, other securities, mutual funds, tax shelters, qualified education benefits (except as provided in paragraph (3)), and the net value of real estate, income producing property, and business and farm assets, excluding the primary home. . Section 480 of the Higher Education Act of 1965 ( 20 U.S.C. 1087vv ) is amended— in subsection (j), by striking paragraph (4); and by striking subsection (n).
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