CSS Profile: What is a 1040 Schedule 3?
The CSS Profile is becoming more and more popular among colleges. More and more schools require the CSS Profile for financial aid consideration. The CSS Profile is much longer than the FAFSA, as colleges dig deeper into a family’s financial picture to determine the amount of institutional financial aid to offer. One section of the CSS Profile is related to a family’s taxes. Within the tax section, different 1040 tax schedules are considered. We’ll learn more about the 1040 Schedule 3 and how it applies to the CSS Profile.
CSS Profile & 1040 Schedule 3
Let’s take a look at what Schedule 3 is and how it applies to the CSS Profile.
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What is a 1040 Schedule 3?
Generally, Schedule 3 will be found soon after the 1040 in your income tax return.
A 1040 Schedule 3 is an IRS tax form used to claim nonrefundable credits that cannot be claimed on the main Form 1040 or Schedule 2. Nonrefundable credits are tax credits that reduce your tax liability, but if the credit amount is greater than your tax liability, you will not receive a refund for the difference.
Some common nonrefundable credits that can be claimed on Schedule 3 include the credit for child and dependent care expenses, the education credits, and the foreign tax credit.
Not all taxpayers will need to file Schedule 3. If you only have income reported on Form W-2, interest, or dividend income and do not have any nonrefundable tax credits to claim, you will not need to file Schedule 3. However, it's important to check with a tax professional or the IRS website to determine if you need to file this form.
Schedule 3 & Completing the CSS Profile
In the Parent Tax Schedules and Forms section, the CSS Profile asks families which schedules and tax forms they completed. Based on the response to this question, additional questions will be populated. If you select that you did complete Schedule 3, you will be asked additional questions related to the type of income and adjustments reported on your 1040 Schedule 3.
How to Use Schedule 3 to Complete CSS Profile Requirements
The CSS Profile does a good job overall when it comes to making it clear what questions they are asking and where you need to go to find the answers, especially related to your tax return. You can use the guidance provided on the CSS Profile to determine which lines to check in order to complete the corresponding questions on the CSS Profile.
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There is a lot to be gained from our free general financial aid advice, but it’s also a very individual process. If you have remaining financial aid questions, email us to discuss more or book an individual session.