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How do I indicate significant income reduction for 2020 on the FAFSA?
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Given that FAFSA requires information from the previous year, is there a way to indicate changes in income for the present year (2020)?

financial-aid

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Yes, there is a way to indicate changes for present year income changes but it can't be done using the FAFSA, you'll have to contact the schools you are applying to directly. Typically at most schools you're able to ask the financial aid office to review your current year income to determine if any modifications can be made. In order to do this you're first going to need to submit your original FAFSA information from the previous tax year (which it sounds like you've done/are currently working on). Once you've submitted the FAFSA to schools you need to follow-up with the college to see whether they can exercise their professional judgment to use estimated current tax year income instead of the prior year’s income.

The majority of schools will have you and your guardians fill out a form or write a letter describing any special circumstances that might have caused the reduction in income. You will need to provide documentation to support your case, think tax forms, W2s, any documentation at all that supports this reduction of income (for example, letter of layoff or documentation of unemployment benefits). Colleges are authorized to make changes to FAFSA based on dramatic changes in income or increased expenses due to being laid off. Financial aid staff may also use their professional judgment to change the income or assets used in the financial aid calculation if the family has experienced unusual medical expenses or if an income earner has died or been disabled. The financial aid staff may exercise their professional judgment on a case-by-case basis so just because you think you should get more aid or know someone who successfully argued for more aid doesn't mean you'll get it unfortunately. Typically their decisions are final too.

While it's not the most simple process in the world it is definitely possible to get more aid, you just need to be persistent. Good luck with everything and let me know if you have additional questions!

Wow! Thank you so much for that thorough answer to my question! I know how to proceed, thanks to you!
No worries! Glad I could be of help.