The United States Department of Education (U.S.E.D.) is introducing significant changes to the FAFSA completion and verification processes starting with the 2012-13 year and continuing into the 2013-14 year.
These changes will be very different from what most applicants have been used to in the past and we want to alert you to some of the most important changes.
The IRS Data Retrieval Tool
(The U.S. Department of Education has approved a temporary solution for aid applicants who have unsuccessfully attempted to use the IRS Tax Data Retrieval Tool or to obtain IRS Tax Return transcripts. If you attempted to use both the Data Retrieval Tool and to obtain transcripts, yet have been unable to do so, please send a signed copy of your 2011 IRS 1040 Federal Tax Return. We must receive signed tax returns by Monday July 9, 2012 in order to qualify for the exception. After that date, the requirement will revert to use of the IRS Tax Data Retrieval Tool or submission of the IRS Tax Return transcripts.)
Most applicants will need to use the IRS Data Retrieval Tool (IRS DRT) when completing the FAFSA. This is the capability that allows you to transfer your completed IRS tax return data directly to your FAFSA while using FAFSA on the Web to complete your FAFSA. Although U.S.E.D. has stopped short of requiring use of the DRT, the process will be more difficult for those selected for verification if they did not use the DRT (see Verification Changes below).
Using the DRT will prevent you from needing to send copies of your tax documents to the colleges where you are applying for financial aid. But, because this tool is not scheduled to be available until February 1, 2012, early filers will not be able to use it. We recommend that, if at all possible, you complete your taxes before you complete your FAFSA and use the DRT. Do not change the data on your FAFSA that is rolled over from the IRS. Following these recommendations will prevent you from unnecessary hassle in the verification process.
Here are a few other things for you to be aware of:
If you estimate your income when completing your FAFSA, around March 15th, you will receive an e-mail reminder to update the FAFSA with completed tax information. This is really from U.S.E.D. and is not a 'phishing’ email. You should make this update if you are able at the time.
Students and parents who were eligible to use the IRS DRT but didn’t, will receive an e-mail notification encouraging them to return to FAFSA on the Web and use the DRT. These e-mails will be sent beginning on April 1, 2012, with subsequent messages sent every 45 days until mid-September, and then every 60 days until the end of the academic year. E-mails will only be sent once per student/parent.
You can view a helpful tutorial on using the IRS Data Retrieval Tool at IRS Data Retrieval tutorial. This tutorial is helpful when completing your initial FAFSA, or when going back later to use the Data Retrieval Tool if you did not use it during your initial filing. (Note: the IRS Data Retrieval Tool tutorial is not a U.S. Department of Education website).
Pay special attention to first bullet
If your FAFSA is selected for verification, you are required to provide your school with documents to verify the accuracy of your FAFSA data. In the past, income information was verified by the submission of signed copies of the IRS 1040. Beginning in the 2012-13 academic year, an IRS transcript will be required for verification instead of a copy of the 1040. If selected for verification, you will need to contact the IRS and order a tax transcript by one of these methods:
On-Line: The IRS online ordering method, Order A Transcript, makes ordering simple.
If you are a non-tax filer and you are selected for verification, you will need to send your school a copy of IRS Form W-2 for each source of employment income received for tax year 2011. This is a new requirement for non-tax filers.
You will also need to submit a signed statement certifying that you have not filed, and are not required to file, an income tax return for tax year 2011. This statement must detail the sources of income earned from work as reported on the FAFSA and amounts of income from each source for tax year 2011 that is not on W-2s. Please note that the information mentioned in this paragraph is not a new requirement and it appears in section C 2 of our Verification Worksheet, so it is not necessary for you to send a separate statement.