Topics for this Session 2012 2013 Verification Changes Reading Tax Transcripts Understanding the Difference between Legal Guardianship and Custody Automatic zero EFC income threshold increased to $32,000 or less. Enhanced reporting for applicants not required to provide asset information. Eliminates the 30% institutional verification cap. Financial aid administrators have the authority, on a case-by-case basis, to allow updates as a result of a change in the student s marital status. Homeless youth determination reporting changes, and new dependency override flag value of `4` added. Gender question changes. 1
Enhanced high school and federal school code search features. IRS Data Retrieval notifications. Internal Revenue Service (IRS) Data Retrieval Tool enhancements. Student and/or parent ISIR request flag All applicants Household size Number in college SNAP benefits (formerly food stamps) if applicable Child support paid if reported on FAFSA non-filers income earned from work (W-2) any other earnings from work not reported Money received, or paid on your behalf (question 44-J) Signed statement 2
Tax filers Adjusted gross income U.S income tax paid Education credits Specific untaxed income items Untaxed IRA distributions Untaxed Pensions IRA deductions Tax Exempt Interest Filtering question Dynamically displayed messaging Enhanced IRS tracking Notifications to applicants CPS will set flags and comment codes to indicate that the student and/or parent transferred IRS data into the FAFSA on the Web. Comment codes will appear in FAA information section of the ISIR Student inquiry section of FAA Access. 3
Who can use the data retrieval tool The 2012-2013 IRS DRT process can be used by dependent and independent students and the parents of dependent students who meet the following criteria: Must have a valid SSN Must have filed a 2011 IRS tax return, and Must have an unchanged marital status since December 31, 2011. The following list represents who can not use the IRS Data Retrieval tool for 2012-2013: Parents with all zeroes for SSN Any student or parent with a marital status date of January 1, 2012 or later Any student or parent who indicates they have not already filed a tax return or will not file a tax return A married independent applicant and spouse who filed separate tax returns Parents of a dependent student who filed separate tax returns The applicant, parent, or spouse, as applicable, who have filed an amended tax return Student/Parent IRS request flag Blank = IRS data retrieval was not available 00 = student/parent was ineligible to use the IRS data retrieval process in FAFSA on the web and therefore was not presented the option. 01 = student/parent was presented with the option to use the IRS data retrieval process in FAFSA on the web and elected to use it but did not transfer IRS data into the FAFSA. 4
student/parent IRS request Flag 02 = IRS data for the student/parent was transferred from the IRS and was not changed by the user prior to submission of an application or correction. 03 = IRS data for the student/parent was transferred from the IRS and was changed by the user prior to submission of an application or correction. 04 = IRS data for the student/parent was transferred from the IRS and was corrected by the user on a subsequent transaction. Student/parent IRS request flag 05 = student/parent was presented with the option to use the IRS data retrieval tool in FAFSA on the web, but did not elect to use it. 06 = student/parent was presented with the option to use the IRS data retrieval process, transferred IRS data, and then made a FAFSA data element change, making then ineligible to use the IRS FAFSA data retrieval process. Death of student Not a Title IV recipient. Applicant is eligible to receive only unsubsidized student financial assistance. Applicant verified by another school. Post enrollment 5
Under certain conditions, some applicants who were selected for verification will need to submit to the institution an IRS Tax Return Transcript of 2011 tax year information for the applicant, his or her spouse, and his or her parents, as applicable. Data Retrieval Tool not available under these conditions- When the applicant (or parent) did not use the IRS Data Retrieval Process. When information included on the FAFSA using the IRS Data Retrieval Process was changed. When a married independent applicant and spouse filed separate tax returns When the parents of a dependent student filed separate tax returns. When a applicant or applicant s parent change marital status after the end of tax year on 12/31/2011. When the applicant, or parent or spouse, as applicable, filed an amended tax return 6
For an example of the comparison of Tax Return and Tax Transcript Data go to: http://www.usafunds.org/consumer/taxre turntranscriptcomparison.pdf 2012 2013 FAFSA Verification IRS Tax Return Transcript Matrix (Revised March 16, 2012) 2012 2013 FAFSA Information Requiring Verification 2012 2013 FAFSA Q# (Student and Parent) 2012 2013 ISIR Field# (Student and Parent) 2011 IRS Tax Return Transcript Item 2011 IRS 1040 Line # 2011 IRS 1040A Line # 2011 IRS 1040EZ Line # Adjusted Gross Income 35 and 83 42 and 106 Adjusted Gross Income Per Computer 37 21 4 For IRS Form 1040 Transcripts: Income Tax After Credits Per Computer For IRS Form 1040A Transcripts: Total Tax Liability TP Figures Per Computer For IRS Form 1040EZ Transcripts: Total Tax Liability TP Figures Per Computer Income Tax Paid 36 and 84 43 and 107 55 35 10 Education Credits 43a and 91a 50 and 114 Education Credit Per Computer 49 31 N/A IRA Deductions and Payments 44b and 92b 57 and 121 KEOGH/SEP Contribution Deduction + IRA Deduction Per Computer 28 + 32 17 N/A Tax Exempt Interest Income 44d and 92d 59 and 123 Tax Exempt Interest 8b 8b N/A Untaxed Portions of IRA Distributions 44e and 92e 60 and 124 Total IRA Distributions Taxable IRA Distributions 15a 15b 11a 11b N/A Untaxed Portions of Pensions 44f and 92f 61 and 125 Total Pensions and Annuities Taxable Pension/Annuity Amount 16a 16b 12a 12b N/A Notes The 2012 2013 FAFSA Verification IRS Tax Return Transcript Matrix is applicable only to IRS tax filers (IRS Form 1040, 1040A, and 1040EZ) and includes only the income information for tax filers required by the Department to be verified for 2012 2013. IRS Tax Return Transcript Shows most line items from a tax filer's original tax return (Form 1040, 1040A or 1040EZ). An IRS Tax Return Transcript does not include any information from an amended tax return. Per Computer A value calculated by the IRS that is present on certain items of an IRS Tax Return Transcript. The Per Computer amount must be used for verification even if it is different than what was reported by the tax filer to the IRS. Married Filing Separately An applicant or an applicant's parent(s) who filed or will file his or her income tax return as "Married Filing Separately" or who is married to someone other than the individual included on a joint income tax return must provide separate IRS Tax Return Transcripts for each person whose information is included on the FAFSA. Online request Available on the IRS Web site at www.irs.gov In the tool section of the homepage click order a return or account transcript Click order a transcript Enter the tax file s information Click continue In the type of transcript field select return transcript or account transcript and in the tax year field select 2012 7
Calling 800-908-9946 Tax filer must follow prompts to enter information. Select option 1 to request an IRS Tax Account Transcript or select option 2 to request an IRS Tax Return Transcript and then enter 2012. Applicant receive the transcript within 5 to 10 business days from the time the IRS receives the request. Paper Request or Fax Download forms at http://www.irs.gov/pub/irs-pdf/f4506t.pdf. Complete lines 1 9, following the instructions on page 2 of the form. Applicant must sign the form. Mail to the IRS address on page 2 of the form. Or fax to the IRS number on page 2 of the form. Legal Guardianship the definition of legal guardianship does not include your parents, even if they were appointed by a court to be your guardians. You are also not considered a legal guardian of yourself. Legal Custody the legal right to take care of a child such as a child who parents are divorced. 8
2013-2014 Verification Updates V1 Household size Number in college Child support SNAP (Food Stamps) Income/tax data V2 Snap (Food Stamps) V3 Child support 9
V4 Child support SNAP (Food Stamps) High school completion Identity/education purpose V5 Household size Number in college Child support SNAP (Food Stamps) High school completion Identity/educational purpose Income/tax data Household Size V1 & V5 Completed verification worksheet or signed statement from the applicant (and one parent, if dependent) listing the name and age of each household member and the relationship to the applicant. Not required when: Dependent student lists 2 and parent is single, divorced, separated or widowed. Dependent student lists 3 and parents are married. Independent student lists 1 and student is single, divorced, separated or widowed. Independent student lists 2 and student is married. 10
Number in College V1& V5 Completed verification worksheet or signed statement from the applicant (and one parent, if dependent) listing the name and age of each household member attending a Title IV-eligible school at least half time for the award year, and the name(s) of the applicable school(s). Not required when number in college is 1. If the school believes information from the FAFSA or signed statement is inaccurate, it must obtain a statement from each listed school unless the household member is not yet registered or will attend the applicant s school. Child Support Paid V1 & V3 & V4 & V5 Completed verification worksheet or signed statement from applicant (or parent, if dependent) listing: Name of the individual who paid support. Name of the child support recipient. Name(s) of the children for whom support was paid. Amount of support paid during the calendar year. If the school believes information to be inaccurate, it must obtain documentation such as a copy of a separation agreement/divorce decree showing the amount to be paid, a statement from the child support recipient showing the amount paid, or copies of cancelled checks or money order receipts. SNAP (Food Stamps) V1 & V2 & V4 & V5 Completed verification worksheet or signed statement from the applicant (and one parent, if dependent) certifying that they, or another member of the household, received SNAP in calendar year 2011 or 2012. If the institution has reason to believe the signed statement is inaccurate, it must obtain documentation from the applicable issuing agency. 11
High School Completion Status (V4 & V5) Documentation of high school diploma, recognized equivalent or homeschool credential: Copy of applicant s high school diploma or final high school transcript that shows the date the applicant completed secondary school, or alternative documentation if neither of these is available. Copy of one of the recognized equivalents of a high school diploma: General Education Development certificate. Certificate recognized by the state as an equivalent to a diploma. Academic transcript showing successful completion of at least a two-year program fully acceptable toward a bachelor s degree. Documentation that the student excelled in high school if the student did not complete high school and enrolls in at least an associate degree program. Copy of homeschool documentation: Transcript signed by the parent or guardian documenting the successful completion of secondary education, listing the courses completed by the student; OR State-issued homeschool certification credential. Identity/Statement of Educational Purpose (V4&V5) Each applicant must provide in person to an official authorized by the school the following documentation: Government-issued photo identification, such as a driver s license, passport or military ID; AND Signed Statement of Educational Purpose for the 2013-2014 award year. For documentation presented in person, the school must maintain an annotated copy of the ID provided by the student including: Date the identifying document was received; AND Name of the school official that obtained the documentation. If an applicant is unable to provide the information in person, the following must be provided to the school: Copy of a government-issued photo identification, such as a driver s license, passport or military ID; AND Original notarized Statement of Educational Purpose signed by the applicant for the 2013-2014 award year. Income Earned from Work (V1 & V5) Copy of a W-2 Form for each source of employment from 2012; AND Signed statement certifying the applicant has not filed and is not required to file taxes for 2012; AND Signed statement indicating sources and amounts of income earned from work in 2012 not listed on a W-2 Form. If the applicant is unable to obtain the required W-2 Form(s), the school instead may accept a signed statement listing the source and amount of income earned from work, and the reason the W-2 Form(s) is not available. 12
V1 and V5 AGI and U.S. Tax Paid Untaxed IRA Distributions and Untaxed Pension Education Credits IRA Deductions Tax-Exempt Interest No documentation required if the applicant (and/or parent, if dependent): used the IRS Data Retrieval Tool and the information is unchanged (02 IRS Request Flag). If the applicant (and/or parent, if dependent) is unable to obtain a tax transcript, the school instead may accept: Copy of the 2012 tax return (1040 Form), including the tax filer s signature or the signed, stamped, typed or printed name of the tax preparer, and the tax preparer s address, SSN or EIN, or PTIN. If the applicant is unable to obtain a tax return, the school instead may accept: Copy of the W-2 Form(s) for each source of 2012 income. Signed statement by the tax filer listing the 2012 AGI and U.S. tax paid if the individual is self-employed. If the tax filer is not self-employed, only W-2 Form(s) are required. 13
If an individual requests a tax transcript and the IRS, U.S. territory or commonwealth or foreign country cannot provide the requested data, the school must obtain: Copy of the W-2 Form(s) for each source of 2012 income. Signed statement by the tax filer listing the 2012 AGI and tax paid if the individual: Is self-employed. Filed a tax return with a foreign government, or U. S. territory or commonwealth. All information can be found on Ifap.ed.gov Usafunds.org 14