Category Archives: Tax Information

The What and Why of the IRS DRT

The 2018-2019 Free Application for Federal Student Aid (FAFSA) opened on Oct. 1, and the IRS DRT is available for students once again. What is the IRS DRT, you ask? The Internal Revenue Service Data Retrieval Tool (IRS DRT) is a feature located inside the FAFSA. It allows students and parents to transfer 2016 tax information directly from the IRS into the FAFSA. There are several benefits to using the IRS DRT.

First, it saves time as you’re completing the FAFSA. Instead of hunting for the correct numbers on your tax forms and running the risk of making an error, you’ll simply type a few words, click a few buttons, and the bulk of the tax questions on your FAFSA will be complete!

Second, using the IRS DRT reduces your chances of being selected for verification. Verification is the process your school uses to confirm the information provided on the FAFSA is accurate. During the verification process, your school may request various documents to verify the information provided on your FAFSA. Errors that occur when entering tax information manually can cause a student to be selected for verification.

Finally, if you do happen to be selected for verification, having used the IRS DRT will simplify the process. If you use the IRS DRT and are selected for verification, you will not have to provide any documentation to verify tax data. Your school will know it is accurate since it was transferred directly from the IRS into your FAFSA.

If you’ve used the IRS DRT in previous years, you’ll notice that it looks a little different this year. The DRT no longer shows any dollar amounts to the student or parent. This change was made to increase the security of your information during the transfer process.

While using the IRS DRT is optional, students and parents are encouraged to use the tool to create a smoother and more accurate application process.

IRS Data Retrieval Tool Update

If you’ve been following our posts over the last few weeks, you’re probably aware that the IRS Data Retrieval Tool (DRT) has been unavailable for use on the Free Application for Federal Student Aid (FAFSA). This tool allows FAFSA applicants to download their income tax information from the IRS and import it directly into their FAFSA application. While this situation is inconvenient for some, it’s highly recommended that applicants still complete the 2016-17 and 2017-18 FAFSAs by manually entering in their tax information. The IRS DRT service will be up and running again on October 1, 2017… just in time for the new 2018-19 FAFSA application. Please read IFAP’s announcement for further details on this situation.

The IRS Data Retrieval Tool Remains Down Until October 1

Students, Parents and Educators!

News is circulating today that explains why the FAFSA IRS Data Retrieval Tool was taken offline last month and will continue to be offline until the beginning of the next FAFSA cycle, which is October 1, 2017. Read this article from The Washington Post to learn more.

The FAFSA can still be completed by manually entering your 2015 tax information, however the process may take a little longer.

FAFSA and the IRS Data Retrieval Tool

If you’re working on your FAFSA (Free Application for Federal Student Aid) application and plan to use the IRS (Internal Revenue Service) to download your 2015 income tax figures, you may be out of luck. Currently this option, known as the Data Retrieval Tool (DRT), is unavailable. The IRS and the U.S. Department of Education confirmed that the federal government purposefully shut off the IRS DRT amid security concerns and stated that “the online data tool will be unavailable for several weeks.”

If you’re not familiar with the IRS Data Retrieval Tool, it allows students and parents completing the FAFSA to link directly to the IRS and electronically download tax figures into the FAFSA from their tax return. This process allows families a much faster and easier way to enter this information on their financial aid application.

You shouldn’t wait to complete your FAFSA because of the IRS glitch. Instead, you can manually enter your tax information directly into the FAFSA and submit it for processing. You aren’t too late to apply for financial aid if you’re just now completing the FAFSA, but remember that sending it in as soon after the annual start date of Oct. 1 is the best option.

It’s important to note that, at this time, the IRS has not suggested that the Data Retrieval Tool has been attacked or that their systems have been affected. Please follow StartWithFAFSA.org for updates to this current issue with the IRS DRT. We’ll post as soon as the problem has been resolved.

Completing the 2017-18 FAFSA

If you’re completing a FAFSA for the 2017-18 school year, there are some new requirements you should be aware of. One of them is the new FAFSA release date. This form now becomes available on October 1 annually, rather than January 1. This allows you to fill out the FAFSA earlier and possibly learn your financial aid eligibility a little earlier, too.

Another change to the FAFSA allows students and families to complete this form using tax information that should already be completed, eliminating the need to update your tax information on your application once your taxes have been filed. Since the latest FAFSA, released on October 1, requires you to use your 2015 tax information, you can pull out your 2015 return and complete your application at FAFSA.gov now! The sooner you apply, the better!

If you’re unsure when to complete the FAFSA or the correct tax information to be used, check out the chart below. Good luck!

Chart detailing when to submit which FAFSA and what tax year information to use. Visit  https://studentaid.ed.gov/sa/resources/2017-18-fafsa-process-changes-text for accessible version.

How to Finish the FAFSA, Steps 3-4: Fill It Out and Sign/Submit

FAFSA Step 3Now that you’ve gathered materials  and created an FSA ID , it’s time to complete and submit the FAFSA at FAFSA.gov.

Applying online is fast, simple and best of all… it’s safe. The online form allows you to rapidly transfer previously filed tax information and has many “helps and hints” along to way to answer any questions that may come to mind. And, you may choose to send your FAFSA results to up to 10 schools that interest you.

FAFSA Step 4Be sure to enter your information exactly as it appears on your Social Security card. When finished, you will sign with your FSA ID. Don’t forget to hit “Submit” when you’ve completed the form!

What’s Changing with the FAFSA?

The FAFSA is new and improved and will be ready for you faster than ever! Students and parents now have the opportunity to complete the FAFSA, or Free Application for Federal Student Aid, as soon as Oct. 1—three months earlier than before! The earlier you apply, the better, as some financial aid options may be exhausted later in the year.

Another update to the FAFSA makes the process even more convenient. Families will now use tax information that they should have already filed. This means families won’t have to update the FAFSA after they file taxes next year. Use the chart below to find out which forms are right for you.

FAFSA Completion Chart

To complete and submit the FAFSA online, students and parents will both need to create an FSA ID (Federal Student Aid ID) at FSAID.ed.gov. This username/password serves as your signature on the FAFSA and student loan applications and allows you to access other federal aid websites. It can be beneficial for families to create their FSA IDs now in order to speed up the FAFSA application process in October. Once the FAFSA is available, it can be completed online at fafsa.ed.gov.

How Do I Enter My Final Tax Figures?

If you used tax estimates on your FAFSA and it’s been three weeks since you filed your taxes with the IRS online, then it’s time to update your FAFSA with your final tax information. Here’s how:

  • Go to fafsa.gov and log in with your FSA ID.
  • Enter your Save Key, if prompted.
  • Click on Financial Information and change your answer from ‘Will file’ an IRS income tax return to ‘Already completed’ your tax return.
  • Answer the questions that follow to see if you qualify to use the IRS Data Retrieval Tool (DRT). If you do, you will be given an option to link to the IRS website and will then transfer your 2015 tax information to your FAFSA.
  • Students and parents may each use the IRS DRT to update their individual tax information
  • Once completed, be sure to enter your FSA ID on the last page as your signature and then click ‘Submit My FAFSA Now’.

You may also choose to enter your actual tax figures manually if the IRS DRT is not an option for you. Once your updated FAFSA has been submitted, the new figures will be sent directly to the schools listed on your application. If your financial aid office requires any additional information, they will contact you directly. If you have questions, contact the Federal Student Aid Information Center at 1-800-4-FED-AID.

Common FAFSA Corrections and Modifications

Perhaps you’ve had a change in circumstances since you submitted the FAFSA, or you’ve discovered that even with the help of FAFSA.gov’s built-in fact checker your FAFSA contains an error. Here are some of the most common pieces of information to be updated or corrected:

  • Your marital status
  • Your parents’ marital status
  • The death of a parent or sibling
  • Employment status
  • Major medical expenses
  • Social Security numbers
  • Parents’/stepparents’ income
  • Untaxed income
  • Income taxes paid
  • Household size
  • Number of household members in college
  • Real estate and investment net worth

So, what happens if you’ve made a mistake? If necessary, corrections to FAFSA data may be made by:

  • Visiting FAFSA.gov and accessing your data with your FSA ID.
  • Requesting changes through the financial aid office of the school you plan to attend. (you’ll need your Data Release Number, or DRN.)
  • Submitting documentation to the college’s financial aid office.

If you used last year’s tax information as an estimate when filing the FAFSA, it is also required that you make the correction once you’ve filed 2015 taxes.

Who is My Parent on the FAFSA?

Financial aid eligibility can vary depending on whether you’re considered a dependent or independent student. The Free Application for Federal Student Aid (FAFSA) requires dependent students to show their parent’s information on the form. Independent students are not required to include it. What if your parents are divorced or separated? What if you live with your grandmother? Whose information should be included?

The Department of Education provides these guidelines to explain who should be counted as a parent. Unless otherwise noted, “parent” means the legal (biological and/or adoptive) parent or stepparent. The rules below apply to legal parents regardless of gender.

    • If your parents are living and legally married to each other, answer the questions about both of them.
    • If your parents are living together and are not married, answer the questions about both of them.
    • If your parent is widowed or was never married, answer the questions about that parent.
    • If your parents are divorced or separated and don’t live together, answer the questions about the parent with whom you lived more during the past 12 months. If you lived the same amount of time with each parent, give answers about the parent who provided more financial support during the past 12 months or during the most recent year that you actually received support from a parent.
    • If your parents are divorced but live together, you’ll indicate their marital status as “Unmarried and both parents living together,” and you’ll answer the questions about both of them.
    • If your parents are separated but live together, you’ll indicate their marital status as “Married or remarried,” and you’ll answer the questions about both of them.
    • If you have a stepparent who is married to the legal parent whose information you’re reporting, you must provide information about that stepparent as well.
    • The following people are not your parents unless they have adopted you: grandparents, foster parents, legal guardians, older brothers or sisters, and uncles or aunts.

If you’re still unsure, contact the Federal Student Aid Center at 1.800.4.FED.AID, 1.800-433-3243.