The Verification Process
What is Verification
Conflicting Information
IRS Data Retrieval Tool
Tax Transcripts
Deadlines
Non Tax Filers
Corrected Tax Returns
Correction vs Update
Special Circumstances
What is verification
The financial aid process is based on the assumption that the student and often, the student's parents, are responsible for paying for college. To determine the family's ability to pay for college we use a formula. The formula uses data collected on the Free Application for Federal Student Aid (FAFSA) regarding income, assets, household size and the number of household members attending college at least half-time during academic year.
When you completed the FASFA you were asked for income data from the "base year". For the 2011-2012 academic year, the base year was 2010. For the 2012-2013 academic year, the base year is 2011. Often, the FAFSA is prepared before tax returns have been completed. You are able to provide estimated income information on the FAFSA. However, when estimated information is used, the FASFA must eventually be updated with the actual information from the tax return. In April the FAFSA processor sends a reminder to applicants to update their information.
A percentage of the applications submitted are selected for the verification process. There is nothing specific that will automatically cause you to be selected for verification. Nationwide, approximately 30 percent of the applications are selected.
The verification process requests that students and parents confirm the information that was submitted originally on the FAFSA. In the 2011-2012, this process involves requesting a signed photocopy of the 2010 federal tax returns and a signed "Verification Worksheet". In 2012-2013 this involves having the student (and the parents) use the IRS Data Retrieval tool available on the FAFSA on the Web and providing us with a signed "Verification Worksheet".
Conflicting information
If, upon review of your financial aid application, we discover conflicting information, we are required to resolve the conflict. To do this, we will contact you via UT Dallas e-mail and request additional information.
If you misfiled your tax return, and we identify this error in the review of your financial aid application and supporting documents, we are required to notify you of the error and request that you submit a correction to the IRS. While we cannot require you to make the correction, we cannot continue the processing of your financial aid application until this has been done. The most common error we find is when a married couple chooses to file as single. If you were married on the last day of the tax year you must file as either married, or married filing separately. You should consult with the IRS or a qualified tax professional if you have questions.
Household Size
A common conflict we discover is when the household size reported on the FAFSA is different than than the household size reported on the verification worksheet. We will usually use the information reported on the worksheet to complete the verification process. However, if the number in the household is dramatically different than what was reported on the FAFSA, or what was reported in the previous year, we may request that you submit our "Household Size/Number in College" form.
Low Income
If you or your parents reported on the FAFSA that you had no income in 2011, we may ask you to provide to us an explaination as to what resources were available to you to provide for your living expenses, such as housing and food. A number of benefit programs are not reported on the FAFSA, such as food stamps and government housing assistance. If that is how you supported yourself, please let us know. If you were living with someone who was providing shelter and meals, let us know who, and their relationship to you.
IRS Data Retrieval Process
The IRS Data Retrieval Tool allows students and parents access to the IRS tax return information needed to complete the Free Application for Federal Student Aid (FAFSA). Students and parents are able to transfer the data directly into their FAFSA.
If you are eligible to use the IRS Data Retrieval Tool, we highly recommend using the tool for several reasons:
- It’s the easiest way to provide your tax data.
- It’s the best way of ensuring that your FAFSA has accurate tax information.
- You won’t need to provide tax documents the school.
If you do not use the IRS Data Retrieval Tool to provide tax information, and UT Dallas requests a copy of your tax return or your parents’ tax return, you will be required to obtain an official tax transcript from the IRS.
Does everyone need to use the IRS Data Retrieval process?
You are not required to use the IRS Data Retrieval tool, but if you have been selected for verification, and you do not use this feature, or you are unable to use this feature, you must provide us with a tax transcript from the IRS. Beginning in the 2012-2013 academic year, we can not accept a photocopy of your federal tax return.
When can I begin using the IRS Data Retrieval tool?
The IRS Data Retrieval Tool is available as soon as two weeks after you have submitted your taxes, if you file your taxes electronically. If you submit your tax return in paper form it takes about eight weeks for the information to be available.
Tax transcripts
If you are unable to use the IRS Data Retrieval tool available at FAFSA on the Web, and you have been selected for verification, you will need to obtain a "Tax Transcript" from the IRS. This can be done by visiting an IRS Service Center, or by calling 800-908-9946. There are occasions where you will not be eligible to use the IRS Data Retrieval tool. For example, if you or your parents have separated or divorced after December 31, 2011; you or your parents filed your tax return as married filing separately or; if you or your parents have filed an amended tax return.
Deadlines
We do not usually offer a student financial aid until the verification process has been completed. Therefore, the sooner you submit the materials requested, the sooner we will be able to offer you financial aid. In rare cases it is possible to be selected for verification after you have been offered financial aid. In this case you have 30 days to provide the requested documents. We reserve the option of cancelling a financial aid offer if the requested materials are not submitted within this time frame. If you need an extension of the deadline, you should contact us.
Non Tax Filers
If you or your parents are not required to file a federal tax return, there is a place on the Verification Worksheet to indicate this. You must provide us with a detailed list of your income in the previous year. If the income was earned in foreign currency you must convert the currency to US dollars as of the date you completed the original FAFSA.
If you indicate you had no income in the previous year, you may be asked to document how it is you were able to support yourself.
Untaxed Income
Some types of income are not reported on the tax return, but still must be included on the FAFSA. The most common is what you contributed to a tax deferred retirement account. This is just what you contributed, not what you employer contributed This value is reported to you on the W-2 form you received from your employer.. Other types of untaxed income that must be reported on the FAFSA, and therefore, on the verification worksheet are workers’ compensation, disability, etc. Also include the first-time homebuyer tax credit from IRS Form 1040—line 67. Don’t include student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Investment Act educational benefits, on-base military housing or a military housing allowance, combat pay, benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion or credit for federal tax on special fuels.
Corrected Tax Returns
Completing a federal income tax return can be confusing, and it isn't always done correctly on the first try. If you filed your federal tax return incorrectly you will need to submit an amended tax return. When you submit an amended tax return, the IRS Data Retrieval Tool no longer provides the correct data on the FAFSA. You will need to provide us with two IRS generated documents. 1. The Tax Return Transcript and 2. the Tax Account Transcript. We will need both documents, as well as the verification worksheet, to complete the verification process.
Corrections vs Updates
When you have completed your taxes for the base year, you are encouraged to correct the FAFSA with the actual information from your tax return.. However, some of the data fields on the FAFSA can only be changed if, when you completed the FAFSA, the information was incorrect. For example, if you were married on the day you completed the FAFSA, but you indicated that you were single on the form, you can make this correction (we may request additional information). However, if you were single on the day you completed the FAFSA, and you have since married, you may not make that change, as that is considered an update. The same is true for answers to asset questions and questions regarding the household size.
Special Circumstances
The FAFSA collects data that is true as of the day you completed the form. If your situation has changed in such a way that the data reported on the FAFSA is no longer relevant, we want to know that. We have a process to review your Special Circumstance. If you were selected for verification, we must complete that process before we can begin the review of your changes. However, once verification has been completed, we may be able to use information and documentation you provide to update our records.
