A quick update to my previous post: The financial aid office from my college called me yesterday. The very nice representative had spent several days looking for answers to my questions about the 2010-2011 FAFSA form. What she advised me is that BAS is specifically included in the non-taxable income figure, but since there is no direction on any of the other allowances, she would recommend that we not include it.
Obviously, this isn't legally binding information, but it is much more direction that is included on the form. Don't forget that this change is only for 2010-2o11. If you are still filling out the 2009-2010 form, you will need to include BAH and other allowances.