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U.S. Department of Education

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Program Integrity Q&A

Archived Guidancebeginning with the 2012-2013 award year

Questions on this topic are divided into the following  categories:
                - **In** **troductory Verification** **Questions**  (IVQ)
                - **General Questions**  (VER)
                - **Applicants Selected for Verification by the Department**  (DS)
                - **Applicants Selected for Verification by the Institution**  (IS)
                - **Verification Items**  (VI)
                - **Updating Applicant's FAFSA Information**  (UPD)
                - **Acceptable Documentation for FAFSA Information Selected for  Verification**  (DOC)
                - **Changing Applicant's FAFSA Information**  (CHD)

UNLESS OTHERWISE NOTED, THE GUIDANCE BELOW APPLIES TO ALL AWARD  YEARS BEGINNING WITH **2012-2013.**

**Introductory Verification Questions (IVQ)**

IVQ-Q1. What is the effective date of the new  regulations on the verification and updating of student aid application  information for applicants who receive subsidized student financial assistance?

IVQ-A1. Archived 

IVQ-Q2. What are the subsidized and  unsubsidized student financial assistance programs?

  IVQ-A2. Archived 

IVQ-Q3. What is the  impact on the Department's verification selection when FAFSA corrections are  made by a financial aid administrator (FAA) or by a student?

IVQ-A3. If the Department did not select the student for verification  on an earlier transaction, subsequent corrections could result in the student  being selected for verification since the corrected record will be reassessed  in the verification selection process. However, if the correction is the result  of professional judgment by the FAA (assuming the FAA properly flagged the  correction as being made under professional judgment), the record will not go  through verification selection again.

  If the Department selected the student for verification on the  earlier transaction, every subsequent transaction for that award year will  indicate that the student is selected for verification, even a transaction that  was the result of professional judgment. Prior to making professional judgment  adjustments, an institution is required to complete verification when the  student's FAFSA information has been selected for verification by the  Department or the institution. (Section 668.56) [Guidance issued 03/13/2013; **revised  7/7/2015**]

  IVQ-Q4. Will the Verification Tracking Group to which the  student had been initially assigned ever change as a result of subsequent  corrections?

  IVQ-A4. Yes. Beginning with 2016-2017 FAFSA processing, a  student may be moved from a previously assigned Verification Tracking Group of  V1, V4, or V6 to Verification Tracking Group V5 based on corrections made to  the student's CPS record or on other information available to the Department.  In these instances the student is only required to verify the FAFSA information  in the new Verification Tracking Group (V5) that was not verified in the prior  Verification Tracking Group to which the student was initially assigned.

  Also, if verification was not completed for the previously  assigned Verification Tracking Group (V1, V4, or V6) prior to the student being  assigned to Verification Tracking Group V5, the student only has to verify the  FAFSA information required for Verification Tracking Group V5. (Section 668.56)  [Guidance issued 7/7/2015; **revised 2/23/2016**]

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**General Questions (VER)**

VER-Q1. Where can I find guidance on the verification  requirements?

VER-A1. The following resources provide guidance on the  verification requirements:
**General**                - Program Integrity Issues; Proposed Rule (Pages 34825 –  34834)
                - Program Integrity Issues; Final Rule (Pages 66902 – 66913  and 66954 – 66958)

**2012-2013 Award Year Archived**

**2013-2014 Award Year Archived**

**2014-2015 Award Year Archived**

**2015-2016 Award Year Archived**

**2016-2017 Award  Year Archived**

**2017-2018 Award  Year Archived**

******2018-2019 Award  Year Archived**

**2019-2020 Award  Year Archived**

**2020-2021 Award       Year Archived**

**2021-2022 Award       Year Archived**

**2022-2023 Award Year**
                - Verification       of 2022-2023 Award Year FAFSA Information Federal Register notice
                - GEN-21-06       2022–2023 Award Year: FAFSA® Information to be Verified and Acceptable       Documentation  GEN-22-06        Changes to 2022-2023 Verification Requirements  2022–2023        ISIR Guide  2022–2023        FAFSA Verification-IRS Tax Return Transcript Matrix   **2023-2024 Award Year**                    Free        Application for Federal Student Aid (FAFSA®) Information to be Verified        for the 2023-2024 Award Year
GEN-22-09        2023–2024 Award Year: FAFSA Information to be Verified and Acceptable        Documentation
GEN-22-15        FAFSA® Simplification Act Changes for Implementation in 2023-24
2023-2024        Application and Verification Guide
2023-2024        ISIR Guide
2023-2024        FAFSA Verification-Internal Revenue Service (IRS) Tax Return Transcript        Matrix  VER-Q2. Does the use of professional judgment by a financial aid  administrator (FAA) automatically require an applicant to be selected for  verification by the institution, therefore requiring the institution to  complete verification prior to making a professional judgment decision?   VER-A2. No. An institution is only required to complete  verification prior to making professional judgment adjustments when the  applicant's FAFSA information has been selected for verification by the  Department or by the institution. (Section 668.53) [Guidance issued 01/26/2012]  VER-Q3. Are adjustments to an applicant's FAFSA information that are based on professional judgment selected for verification?  VER-A3. Archived   VER-Q4. May an institution delay disbursing Title IV student  financial assistance until the institution completes verification of the FAFSA  information it selected beyond the items required by the Department?    VER-A4. It depends on the FAFSA information that has been  selected for verification. An institution may delay disbursing Title IV student  financial assistance if the FAFSA information that it has required to be  verified would impact the applicant's Title IV student aid eligibility. For  example, while not required by the Department, the institution requires  verification of an applicant's claim that she is an emancipated minor and thus  is independent. Because the result of verification could change the applicant's  dependency status and, therefore, her Title IV eligibility, the institution may  delay disbursing the federal aid until the question of emancipation has been  verified.    However, if the item(s) the institution selects for verification  would not impact the applicant's eligibility for Title IV student financial  assistance, the institution may not delay disbursing Title IV student financial  assistance until verification of those items is completed. For example, the  institution requires verification of home equity to determine the applicant's  eligibility for state or institutional aid. Because there will be no impact on  the applicant's Title IV eligibility regardless of the result of verification,  disbursement of Title IV aid may not be delayed while waiting for verification  of home equity. (Section 668.58(a)) [Guidance issued 01/26/2012]   VER-Q5. Are Quality Assurance (QA) institutions exempt from the  new verification rules beginning with the 2012-2013 award year?    VER-A5. Archived    VER-Q6. Must an institution complete verification for selected  applicants who will receive aid only from the unsubsidized Title IV student aid  programs and are not eligible for any aid from the Title IV subsidized student  aid programs?   VER-A6. No. An institution is not required to complete  verification for applicants who are only eligible for aid from the unsubsidized  Title IV student aid programs, i.e., Direct Unsubsidized Loans and PLUS Loans,  and who are not eligible for any aid from the subsidized Title IV student aid  programs. [Section 668.54(b)(1)(iii)] [Guidance issued 03/13/2012; **revised  7/7/2015**]    VER-Q7. Must an institution complete verification for a selected  applicant who is eligible for both subsidized and unsubsidized Title IV student  aid when the applicant chooses not to accept the subsidized aid?  VER-A7. An applicant who is eligible for subsidized and  unsubsidized Title IV student aid may not avoid completing verification by  accepting only the unsubsidized Title IV student aid. In such a case, the  institution must complete verification for the applicant to be eligible for any  Title IV student aid.    However, except for applicants who are in Verification Tracking  Group V4 or V5, an institution may, on a case by case documented basis,  disburse unsubsidized Title IV aid to those applicants who are selected for  Verification Tracking Group V1 if the institution has determined that there  will be a delay in the completion of verification. Also refer to Electronic  Announcement dated October 31, 2016. [Sections 668.51(a),  668.54(b)(1)(ii) and (iii)] [Guidance issued 03/13/2012; **revised 12/08/2017**]   VER-Q8. How should an institution proceed if a selected  applicant receives unsubsidized student financial assistance during the first  half of the award year, but is later awarded subsidized student financial  assistance (i.e., FWS or Perkins Loans) for the second half of the award year?   VER-A8. The institution is not required to complete verification  during the first half of the award year because the applicant was only  receiving aid under the unsubsidized student financial assistance programs.  However, once the institution awarded the applicant subsidized student  financial assistance in the second half of the award year, the institution must  complete verification for the entire award year according to the new  verification regulations. [Sections 668.51(a), 668.54(b)(1)(ii) and (iii)]  [Guidance issued 03/13/2012]    VER-Q9. Because graduate students are ineligible for need-based Title  IV grants and will no longer be eligible to receive subsidized Direct Loans,  are there any conditions under which graduate students' FAFSA information will  need verification?    VER-A9. Since graduate students remain eligible for subsidized  Title IV aid in the form of FWS and Perkins Loans, if the institution  participates in one or both of those programs it is likely that at least some  graduate students will need to be verified. Verification would be required if,  under the institution's awarding policy for FWS and/or Perkins, the graduate  student would be awarded aid under those programs. [Sections 668.51(a),  668.54(b)(1)(iii), 34 CFR 674.10(a)(1) and 34 CFR 675.10(a)] [Guidance issued  03/13/2012]   VER-Q10. Is it acceptable under an institution's FWS and Perkins  awarding policy to exclude graduate students from consideration for those  programs or to consider graduate students for those programs only after such  assistance has been offered to eligible undergraduate students?    VER-A10. No. An institution is not allowed under its packaging  policies to exclude eligible graduate students from consideration for  assistance under the FWS or Perkins Loan programs or to consider eligible  graduate students for assistance under those programs only after such  assistance has been offered to eligible undergraduate students. The regulations  provide that assistance under the FWS and Perkins Loan programs must be made  reasonably available to all eligible students, including graduate students.  [Sections 34 CFR 674.10(a)(1) and 34 CFR 675.10(a)] [Guidance issued  03/13/2012]    VER-Q11. May an institution disburse unsubsidized Title IV  student aid, i.e., Direct Unsubsidized Loans and PLUS Loans, prior to  completing verification for a selected applicant who is eligible for both  subsidized and unsubsidized Title IV student aid?    VER-A11. Except for applicants who are in Verification Tracking  Group V4 or V5, an institution may, on a case by case documented basis,  disburse unsubsidized Title IV aid to those applicants who are selected for Verification  Tracking Group V1 if the institution has determined that there will be a delay  in the completion of verification. When determining the amount of the  unsubsidized aid to be disbursed, the institution must ensure that the  subsidized aid the applicant is estimated to receive is considered. After  verification is completed, the institution must ensure that both the subsidized  assistance and the unsubsidized assistance are adjusted, if necessary. Also  refer to Electronic Announcement dated October 31, 2016. [Sections 668.51(a)] [Guidance issued  10/10/2012; **revised 12/08/2017**]  VER-Q12. Can an institution determine which of  its staff are authorized to review the identity of an applicant selected for  verification groups V4 or V5?  VER-A12. Archived  Top    **Applicants Selected for Verification by the Department (DS)**   DS-Q1. May an institution require an applicant  who was selected for verification by the Department to verify other FAFSA  information in addition to those items identified by the Department for the  award year?    DS-A1. Archived  DS-Q2. When an applicant is not selected for  verification by the Department on the applicant's initial transaction, is it  possible for that applicant to be selected for verification by the Department on  a subsequent transaction?  DS-A2. Archived  DS-Q3. May an institution require an applicant selected for  verification by the Department to submit a tax transcript and only accept a  signed copy of the income tax return if the applicant is unable to obtain the  tax transcript?  DS-A3. An institution may request a copy of a tax return  transcript in lieu of a signed copy of an income tax return but not require  it.  However, if an institution has concerns about the validity of the  income tax return submitted, it may require a tax return transcript or any  other documentation specified in the annual *Federal Register notice*.   The institution must document the reason why the income tax return was not  acceptable.  (Sections 668.54(a), 668.56 and 668.57) [Guidance issued 11/19/2019]  Top    **Applicants Selected for Verification by the Institution (IS)**  IS-Q1. May an institution select applicants  for verification other than those selected by the Department?   IS-A1. Archived     IS-Q2. Must an institution require an  applicant it selects for verification to verify all of the FAFSA information  identified by the Department for the award year? Must the institution comply  with the "acceptable documentation" requirements for the FAFSA  information it selects for verification?  IS-A2. Archived   Top    **Verification Items (VI)**  VI-Q1. Are tax filers who filed or will file a tax return  required to verify income earned from work?  VI-A1. No. Tax filers who filed or will file a tax return are  not required to verify income earned from work. (Section 668.56) [Guidance  issued 01/26/2012]  VI-Q2. Are institutions required to verify the  receipt of - Supplemental Nutrition Assistance Program (SNAP) – Food Stamps -  benefits that was reported on a verification worksheet or other documentation  at the institution, but not reported on the applicant's FAFSA?  VI-A2. Archived   VI-Q3. Must an institution require an  applicant selected for verification to verify receipt of SNAP benefits (food  stamps) if the applicant or someone in the applicant's household, or if  applicable, the applicant's parent's household, also reported receipt of one of  the other means-tested federal benefits that would make the applicant eligible  for one of the alternate EFC calculations?  VI-A3. Archived   VI-Q4. How are distributions from an Individual Retirement  Account (IRA) handled by the FAFSA-IRS Data Retrieval Tool, and how should a  school address any portion of such a distribution that is "rolled  over" into another qualified IRA? How are distributions from pensions and  other annuities treated?   VI-A4. IRS requirements, as discussed in IRS Publication 75 and  IRS Publication 575, provide that most distributions from IRAs (as well as from  most pensions and annuities) are treated as taxable income. However, those  publications discuss allowing some or all of these distributions to be excluded  from taxable income under certain conditions. If none of the exclusionary  conditions apply, the tax filer is instructed to report the full amount of the  distribution on IRS Form 1040 line 15b for an IRA distribution and line 16b for  pensions and annuities. If, however, the tax filer is eligible to exclude some  or all of the distributions, the IRS instructs the tax filer to enter the full  amount of the distribution on IRS Form 1040 line 15a or 16a, as appropriate.  The tax filer is then instructed to subtract from the amount in 15a or 16a any  portion of the distribution that, under IRS rules, is exempt from being  considered as taxable income. The difference is then reported on lines 15b or  16b, as appropriate, and becomes part of the taxable income and thus, part of  the tax filer's adjusted gross income (AGI). If there are qualified rollovers,  the IRS guidance tells the tax filer to enter the word "Rollover" on  the tax return next to line 15b or 16b. Note that the corresponding IRA line  items for an IRS Form 1040A are 11a and 11b for IRAs, and 12a and 12b for  pensions and annuities.   The summary above is not provided as official IRS guidance. Tax  filers should consult the IRS or their tax advisors for definitive guidance on  the rules governing the treatment of IRAs and pensions and annuities for tax  purposes.   FAFSA Requirements: Generally, amounts of any distributions that  were excluded from taxable income under the IRS rules—the difference between  line 15a and line 15b or between line 16a and 16b—are considered untaxed income  for the purpose of calculating an applicant's expected family contribution  (EFC), and therefore, should be reported on the FAFSA as responses to the IRA  and pension questions. However, the calculation of an EFC allows for the  exclusion of any amount of the distribution that is a rollover. Thus the FAFSA  instructions tell the applicant to exclude rollover amounts when answering the  above FAFSA questions. This guidance is also provided in Chapter 2 of the  Department's Application and Verification Guide that is part of the Federal  Student Aid Handbook.    IRS Data Retrieval Tool: Of course, the FAFSA-IRS Data Retrieval  Tool cannot know if the word "Rollover" was included on the tax  return. Therefore, it assumes that the total difference between the  distribution reported on line 15a or 16a, and the taxable portion on line 15b  or 16b is untaxed income for EFC purposes, and that amount will be transferred  from the FAFSA-IRS Data Retrieval Tool into the FAFSA as untaxed income for IRA  distributions or pension distributions.   The FAFSA applicant, the applicant's parent, or the institution may  modify the amount that the FAFSA-IRS Data Retrieval Tool transferred into the  FAFSA, if all or a portion of that amount should not be included as untaxed  income because of a rollover. To support such a change, the institution must  maintain documentation (see below) that the amount not included in the FAFSA  was an amount that was the result of a rollover.    Beginning with the 2018-2019 FAFSA processing year, if the  applicant or the applicant's parent indicate that the amount transferred from  the IRS into the FAFSA for the IRA distributions field or pension distributions  field includes a rollover, he/she will be required to provide the amount of the  rollover in a new entry field.  Our system will then subtract the  reported rollover amount from the amount of the IRA or pension distribution  that was transferred from the IRS, and the result will be used in the  calculation of the applicant’s EFC.    Verification Requirements: Since neither the information from  the FAFSA-IRS Data Retrieval Tool nor an IRS Tax Return Transcript will include  the tax filer's "Rollover" notation, to verify the amounts that  should be included on the FAFSA, the institution must obtain a written  statement from the tax filer indicating the amount of the distribution that was  excluded because it was an authorized IRS rollover. Acceptable documentation  could be a signed statement from the tax filer. Acceptable documentation could  also be a notation by the tax filer on the IRS Tax Return Transcript that  includes the word "Rollover" beside the applicable item(s) on the  transcript, similar to the instructions provided for the IRS Form 1040 or  1040A. If the institution accepts as documentation of the rollover a notation  on the IRS Tax Return Transcript, it must ensure that the notation is signed and  dated by the tax filer.    If the IRA or pension distributions were the only tax  information that was changed for tax filers who used the IRS DRT, an  institution should accept from the tax filer a signed statement confirming that  the IRA or pension distributions included a rollover.  A tax transcript  would only be necessary if other IRS tax information was changed. [Guidance  issued 05/04/2012; **revised 12/08/2017**]   VI-Q5. Must an institution complete verification of all FAFSA  information identified by the Secretary in the July 13, 2011, Federal Register  notice for selected applicants who are eligible for either of the alternate  expected family contribution (EFC) calculations: Automatic Zero EFC (Auto Zero  EFC) or Simplified Needs Test (SNT)?   VI-A5. Archived
 VI-Q6. Are institutions required to verify the payment of Child  Support that was reported on a verification worksheet or other documentation at  the institution, but not reported on the applicant's FAFSA?

 VI-A6. Archived

  VI-Q7. Must an institution complete verification of all FAFSA  information identified in Verification Tracking Groups V1 or V5 even if the  selected applicant is eligible for either of the alternate expected family  contribution (EFC) calculations: Automatic Zero EFC (Auto Zero EFC) or  Simplified Needs Test (SNT)?

 VI-A7. Archived

 VI-Q8. What is the language in the "Statement of  Educational Purpose" that institutions must use for students placed in  Verification Tracking Groups V4 or V5?

  VI-A8. Archived

  VI-Q9. Must an institution complete verification of all  FAFSA/ISIR information identified in Verification Tracking Groups V1, V4, V5 or  V6, even if the selected applicant is eligible for either of the alternate  expected family contribution (EFC) calculations: Automatic Zero EFC (Auto Zero  EFC) or Simplified Needs Test (SNT)?

 VI-A9. Generally, yes for SNT-eligible applicants and no for Auto  Zero EFC-eligible applicants.

 The only difference in the EFC calculation for SNT-eligible  applicants is the elimination of assets, and assets are not required to be  verified. Therefore, SNT-eligible applicants who are selected for verification  must verify all relevant FAFSA/ISIR information related to the Verification  Tracking Group they are placed in.
  For Auto Zero EFC-eligible applicants placed in Verification  Tracking Groups V1, V5 or V6 (for the 2014–2015 award year through the  2016–2017 award year), the FAFSA/ISIR information that must be verified varies  slightly between dependent and independent applicants.

 For dependent applicants, only the following FAFSA/ISIR  information must be verified:
- The parents' AGI if  they were tax filers;
- The parents' income  earned from work if they were nontax filers;
- The applicant’s high  school completion status and identity/statement of educational purpose, if  placed in Verification Tracking Group V5; and
- The receipt of SNAP  benefits (food stamps) by any household member if the receipt of these benefits  qualified the applicant for Auto Zero EFC.

For independent applicants, only the following FAFSA/ISIR  information must be verified:
- The applicant's and  spouse's AGI if they were tax filers;
- The applicant's and  spouse's income earned from work, if they were nontax filers;
- The applicant’s high  school completion status and identity/statement of educational purpose, if  placed in Verification Tracking Group V5;
- The number of  household members to determine if the independent applicant has one or more  dependents other than a spouse; and
- The receipt of SNAP  benefits (food stamps) by any household member if the receipt of these benefits  qualified the applicant for Auto Zero EFC.

For all Auto Zero EFC-eligible applicants placed in Verification  Tracking Group V4:
- The applicant’s high  school completion status and identity/statement of educational purpose; and
- The receipt of SNAP  benefits (food stamps) by any household member if the receipt of these benefits  qualified the applicant for Auto Zero EFC.

The guidance above continues to apply for the 2017–2018 and  subsequent award years, except applicants are no longer assigned to  Verification Tracking Group V6 and SNAP is no longer a verifiable item.  [Section 668.56] [Guidance issued 05/02/2014; **revised 3/21/2017**]

  VI-Q10.  What FAFSA/ISIR information must be verified if an  institution receives an ISIR with an IRS Request Flag value of 07?

  VI-A10.  An IRS Request Flag with a value of 07 indicates  that the applicant or parent filed an amended tax return. Therefore, if an  institution receives an ISIR with an IRS Request Flag value of 07, it must  contact the applicant to obtain the documentation needed to make changes to any  of the FAFSA/ISIR data items that were amended, regardless of whether those  items are required to be verified.   [Guidance issued 12/08/2017; **and  applies beginning with the 2018-2019 FAFSA processing year**]

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**Updating Applicant's FAFSA Information (UPD)**

 UPD-Q1. When an FAA updates an applicant's marital status  "to address an inequity or to reflect more accurately the applicant's  ability to pay" under §668.55(c), what other information must also be  updated?

  UPD-A1. Usually when the applicant's marital status changes,  there is no updating of the applicant's dependency status or, for applicants  selected for verification, household size or number in college. However, under  §668.55(c), an FAA may update the applicant's FAFSA information due to a change  in the applicant's marital status if the FAA determines it is necessary to  address an inequity or to reflect more accurately the applicant's ability to  pay.

  If an FAA chooses to exercise the authority allowed under  §668.55(c), all relevant FAFSA information must be updated to be consistent  with the new marital status, including the spouse's financial information, for  applicants whose dependency status changes, or for applicants who are selected  for verification. The FAA updates these applicants' marital status on a  case-by-case basis and must document the reason for the decision.

 Likewise, for an applicant who was independent only because he  or she was married when the FAFSA was first completed, if the FAA changes the  applicant's marital status to unmarried, making the applicant dependent, the  FAFSA must be updated with parental information. [Section 668.55(c)] [Guidance  issued 01/26/2012; **revised 03/13/2012**]

  UPD-Q2. What happens when a change to an applicant's marital  status is made?

  UPD-A2. When an applicant's marital status is updated, the  Department's Central Processing System (CPS) will reject the resulting  transaction. The FAA may use FAA Access to CPS Online to enter an FAA-only  reject override that will result in a new transaction with the updated  dependency status. [ISIR Guide] [Guidance issued 03/13/2012; **revised  04/04/2014**]
  UPD-Q3. If an applicant changes his or her marital status on the  FAFSA and the institution agrees with the change by overriding the reject, must  the institution recalculate the applicant's need-based aid based on the new  Expected Family Contribution (EFC)?

 UPD-A3. In almost all cases, a change in a student's marital  status will change his or her EFC, and there can be only one EFC for a student  for an award year (except when he or she becomes a graduate student during the  award year). Therefore, the new EFC must be used to calculate the student's  eligibility for all Federal student aid for the award year, which may require  recalculating aid that was awarded or disbursed based on the earlier EFC.  Adjustments to aid that has already been disbursed is not required if the  student is no longer enrolled at the institution for the award year, unless the  student subsequently reenrolls during the award year. For example, a dependent  student who was awarded aid at School A leaves to get married and then enrolls  at School B. The student then requests to be treated as married, and School B  agrees and submits the override to CPS. While School B must use the new EFC for  any aid it will award, School A does not need to recalculate the awards it made  and disbursed, unless the student returns during the award year. [Guidance  issued 05/02/2014]

  UPD-Q4. If an institution decides to update a student’s marital  status, must it first complete verification if the student had been selected  for verification under the current marital status?

UPD-A4. No. This is not a case of an institution having to  perform verification before making professional judgment changes to the FAFSA.  If an institution determines that updating a student’s marital status is  warranted—i.e., necessary to address an inequity or to reflect more accurately  the applicant’s ability to pay—it should change the student’s marital status  and other relevant data first and then complete verification of the updated  application, which would include verifying the information of the student’s  spouse or parents, as appropriate. [Guidance issued 09/03/2014]

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**Acceptable Documentation for FAFSA Information Selected for  Verification (DOC)**

DOC-Q1. How can the IRS Data Retrieval Process  be used to satisfy the verification requirement if the tax filer has not filed  an income tax return at the time of completing the FAFSA?

DOC-A1. Archived

DOC-Q2. What documentation must be collected from an applicant who was  selected for verification if the applicant and/or spouse, or parent(s) filed an  amended tax return with the IRS?

DOC-A2. The Department's objective is to ensure that Title IV aid eligibility  determinations are made based on the most accurate information possible. The  FAFSA on the Web IRS Data Retrieval Tool (DRT) will only transfer certain tax  information from an original tax return and none of the tax information from an  amended tax return will be included.  However, beginning with the  2018-2019 FAFSA processing year, the ISIR will indicate that the return was  amended.  Therefore, when an institution is aware that an amended tax  return was filed, the institution must submit to the Secretary any changes to a  nondollar item, or a single dollar item of $25 or more.The institution must obtain a signed copy of the IRS Form 1040X  that was filed with the IRS, in addition to one of the following—
- IRS DRT information on  an ISIR record with all tax information from the original tax return; or
- an IRS Tax Return  Transcript (that will only include information from the original tax return and  does not have to be signed), or any other IRS tax transcript(s) that include  all of the income and tax information required to be verified.

Note that there may be  rare cases when an applicant and/or spouse, or parent(s) did not file an IRS  Form 1040X with the IRS, but whose tax and income information was amended by the  IRS.  In these limited cases, an institution  may accept documentation that include the change(s) made by the IRS, in  addition to one of the items mentioned above.  [Guidance issued 01/26/2012; **revised 1/25/2018**]

DOC-Q3. May an applicant have an IRS Tax  Return Transcript sent directly to a college or university?

 DOC-A3. Archived 

DOC-Q4. May an institution decide what  documentation is acceptable for its institutionally selected applicants?

  DOC-A4. Archived

  DOC-Q5. Is the information provided on a verification worksheet  or other documentation at the institution sufficient to verify household size,  number in college, or income earned from work for nontax filers; since the  applicant signs the verification worksheet or other documentation submitted to  the institution acknowledging that the information is correct?

  DOC-A5. A verification worksheet or other documentation at the  institution may serve as the signed statement to verify household size, number  in college, or income earned from work for nontax filers, as long as the  worksheet or other documentation has a certification statement similar to what  is included on the Department's suggested verification text. An institution is  not required to use the suggested verification text developed by the  Department. It may use its own worksheet or require other documentation.  [Guidance issued 01/26/2012; **revised 12/08/2017**]

  DOC-Q6. What documentation must be collected  from an applicant who was selected for verification and whose Institutional  Student Information Record (ISIR) shows receipt of Food Stamps – Supplemental  Nutrition Assistance Program (SNAP)?

  DOC-A6. Archived

 DOC-Q7. For verification of nontax filer  wages, are institutions required to collect both the W-2(s) from all employers  and the signed statement certifying that the individual has not filed and is  not required to file an income tax return, listing all income and sources?

  DOC-A7. Archived 

 DOC-Q8. For verifying child support paid,  please clarify whether the institution is required to obtain the signature of  the person who paid the child support?

  DOC-A8. Archived 

  DOC-Q9. May an institution accept or make a  copy of an IRS transcript that was originally obtained from the IRS?

 DOC-A9. Archived 

 DOC-Q10. May an institution use a Record of  Account Transcript, a Return Transcript for Taxpayer (RTFTP), or an Information  Returns Processing Transcript Request - Wages (IRPTR-W) provided by the IRS to  meet the verification requirements?

  DOC-A10. An institution may accept as  verification documentation any IRS tax transcript that includes all of the  income and tax information required to be verified: adjusted gross income  (AGI), U.S. income tax paid, Untaxed IRA Distributions, Untaxed Pensions,  Education Credits, IRA Deductions and Tax Exempt Interest. Therefore, because  the Record of Account Transcript and the Return Transcript for Taxpayer (RTFTP)  includes all of the above noted information, either document may be used to meet  the verification requirements. The Information Returns Processing Transcript  Request - Wages (IRPTR-W) only provides wage information and therefore can only  be used in lieu of an IRS W-2 form. [Section 668.57(a)(1)(i)] [Guidance issued  05/04/2012; **revised 3/21/2017**] 

 DOC-Q11. In some cases, tax filers who have visited an IRS field  office have been provided with a copy of their IRS tax return stamped  "official" in lieu of an IRS Tax Return Transcript. May an  institution use an IRS tax return that has been stamped "official" by  the IRS as a substitute for an IRS Tax Return Transcript to meet the  verification requirements?

  DOC-A11. Archived

 DOC-Q12. May an institution meet the signature requirements for  verification documentation submitted by an applicant, parent or spouse through  an electronic process?

  DOC-A12. For verification documentation purposes, an institution  may collect an electronic signature for an applicant, parent or spouse if the  process for obtaining the electronic signature includes assurances that the  person providing the electronic signature is the person whose signature is  being collected. Often, this is accomplished through a PIN or password process  where the PIN or password has been assigned only after authentication of the  identity of the person to whom the PIN or password is assigned. [Guidance  issued 06/21/2012]

  DOC-Q13. Is there an instance when an IRS  Request Flag code of "02" would not carry forward to a subsequent  transaction?

  DOC-A13. Archived 

  DOC-Q14. What tax information should an  institution use when both the IRS Data Retrieval Tool is used and an IRS Tax  Return Transcript is obtained?

 DOC-A14. Archived

  DOC-Q15. What documentation is required for an applicant, parent  or spouse who is the victim of identity theft and, as a result, is unable to  use the IRS Data Retrieval Tool or obtain an IRS Tax Return Transcript until  the matter has been resolved by the IRS?

 DOC-A15. Archived

 DOC-Q16. May an institution require an individual who has been granted a  tax filing extension by the IRS to use the IRS Data Retrieval Tool (IRS DRT) or  obtain an IRS Tax Return Transcript before completing verification? Must the  tax return information be submitted to the institution after the income tax  return has been filed?

 DOC-A16. An institution may not  delay completing verification for an applicant when a tax filing extension has  been granted by the IRS. The income and tax verification regulatory requirements  are met if a tax filer who has been granted a filing extension by the IRS  provides the institution with the acceptable documentation consistent with the  verification documents published in the Free Application for Federal Student  Aid (FAFSA®) Information To Be Verified Federal Register notice for the  applicable award year, e.g. a copy of IRS Form 4868 and a copy of IRS Form W–2  for each source of employment income received for the tax year.  This  provision provides extension filers with a timely alternative to complete the  verification process to avoid delaying the applicant's receipt of aid because  of the IRS granted extension. For an individual who was called up for active  duty or for qualifying National Guard duty during a war or other military operation  or national emergency, in lieu of IRS Form 4868, an institution must accept a  signed statement from the individual certifying that he or she has not filed an  income tax return or a request for a filing extension because of that service.  Beginning with the 2018-2019 award year, a signature is no longer required on  the statement. (see final  regulations published on September 29, 2017 [PDF]).

While submission of the  documentation mentioned above meets the verification requirements and allows  Title IV aid to be disbursed, an institution may require an individual granted  an IRS tax filing extension to submit, after the tax return is filed, tax  return information using the IRS DRT, or by submitting an IRS Tax Return  Transcript within the deadline it established that is consistent with the  deadline to submit verification documents published in the annual deadline  dates Federal Register notice. However, beginning with the 2018-2019 award  year, individuals who have only been granted an automatic six-month extension  by the IRS must verify income and tax information either by using the IRS Data  Retrieval Tool or by submitting to the institution an IRS Tax Return  Transcript.  If the required documentation is not submitted by the  institution's established deadline, the student must return all Title IV aid  (Federal Pell Grant, FSEOG, IASG, TEACH Grant, or Perkins Loan) disbursed  before the student was selected, except for Direct Subsidized Loans, Direct  Unsubsidized Loans, Direct PLUS Loans, and Federal Work Study (FWS) wages  earned. No further disbursements of Title IV aid can be disbursed and no  further Federal Work Study (FWS) employment may occur for that award year.  However, an institution may not apply this provision to individuals granted a  filing extension beyond the institution's established deadline because the  individual was called up for active duty or for qualifying National Guard duty  during a war or other military operation or national emergency. [Section 668.57  and 668.60] [Guidance issued 04/25/2013; **revised 1/25/2018**]

 DOC-Q17. Can an institution rely on  documentation of a student's high school completion status or documentation  that a student has the equivalency of a high school diploma that it collected  for purposes other than completing verification to verify a student's high  school completion status?

  DOC-A17. Archived

 DOC-Q18. Must an institution complete verification for students  placed in verification groups V4 or V5 who are only eligible for unsubsidized  student financial assistance?

  DOC-A18. An institution should       verify identity/statement of educational purpose for a student who is only       eligible for unsubsidized student financial assistance and who was placed       in Verification Tracking Groups V4 or V5. This will help ensure that only       eligible students receive aid and will improve the integrity of the Title       IV, HEA programs. Institutions need not verify any of the other FAFSA       information listed under Verification Tracking Group V5 for such students.       [Guidance issued 04/25/2013; **revised       3/10/2023**] 

 DOC-Q19. Are high school diplomas from other  countries acceptable documentation to verify a student's high school completion  status? 

 DOC-A19. Archived 

  DOC-Q20. What must institutions collect when a  student established Title IV eligibility under one of the ability-to-benefit  (ATB) alternatives but is selected under verification groups V4 or V5 to verify  the student's high school completion status?

  DOC-A20. Archived 

  DOC-Q21. After a tax filer uses the IRS Data  Retrieval Tool (IRS DRT) and the ISIR shows an IRS Request Flag code of '02'  (IRS data were imported to the FAFSA and not changed), he or she makes a  correction to one or more of the items that were imported (e.g., the amount for  Untaxed IRA Distributions). The resulting CPS transaction would no longer have  an IRS Request Flag code of '02'. Does the institution need to require the  student to submit an IRS Tax Return Transcript to verify all of the IRS-related  verification items, or can it use the original unchanged values and only verify  the changed value?

  DOC-A21. Archived

 DOC-Q22. Is further verification needed to resolve differences  between what was included on the ISIR and what the student provided as part of  the verification process?

  DOC-A22. No, unless the institution has reason to believe that  the information provided on a verification document is inaccurate. When an  institution obtains acceptable documentation for a verification item, that  documentation will either confirm that the information on the ISIR is correct  or be used to make changes to the ISIR. For example, if upon reviewing an IRS  Tax Return Transcript, the institution finds that the AGI amount from the  transcript differs from what was reported on the FAFSA and shown on the ISIR,  the institution simply submits a change to the CPS (or directs the student to  do so). The institution need not attempt to determine the reason for the  difference. [Guidance issued 05/02/2014]

 DOC-Q23. What is IRS identity theft for purposes of submitting  the alternative verification documentation discussed in Dear Colleague Letter  GEN-13-16 posted to IFAP on June 13, 2013 and in Dear Colleague Letter  GEN-14-05 posted to IFAP on March 25, 2014?

  DOC-A23. IRS identity theft is identity theft that has affected  a tax filer’s IRS tax records. The IRS refers to this as Tax Administration  Identity Theft. This occurs most often when someone other than the tax filer  files a tax return using the tax filer’s identifiers – usually to fraudulently  receive a tax refund. The tax filer may be the first to identify the identity  theft or the IRS may be the first to suspect that there has been Tax  Administration Identity Theft. Only a determination by the IRS of a “Tax  Administration Identity Theft” is applicable for purposes of completing  verification for Federal student aid eligibility.

 While the IRS may acknowledge Non-Tax Administration Identity  Theft, such an acknowledgement is not applicable for verification. Examples of  a Non-Tax Administration Identity Theft are identity thefts that are a result  of a privacy breach at a bank, credit card company, retail or web business, or  because of lost or stolen identity documents. Victims of Non-Tax Administration  Identity Thefts, even if reported to the IRS, may not submit the alternative  documentation discussed in Dear Colleague Letters GEN-13-16 and GEN-14-05 to  complete verification. [Guidance issued 09/03/2014]

  DOC-Q24. If, prior to the March 25, 2014, release of the  2014-2015 identity theft guidance provided in Dear Colleague Letter GEN-14-05,  an institution completed verification for 2014-2015 using the identity theft  guidance provided in Dear Colleague Letter GEN-13-16, must the institution  re-verify the student for 2014-2015 following the guidance in Dear Colleague  Letter GEN-14-05?

  DOC-A24. Archived.

DOC-Q25. If a student who reported an item on  the FAFSA, such as SNAP or child support, then later informs the institution  that he or she did not receive the item, must an institution obtain  documentation from the student confirming non-receipt of that item?

 DOC-A25. Archived 

 DOC-Q26. Is a government-issued photo  identification that is not compliant with the REAL ID Act of 2005, e.g., one  marked “not for federal identification,” acceptable documentation for an  applicant selected to verify identity/statement of educational purpose?

 DOC-A26. Archived 

 DOC-Q27. What documentation is required for an  applicant, parent or spouse who is the victim of IRS tax-related identity  theft?

  DOC-A27.  Archived

  DOC-Q28. Institutions may only accept a signed copy of a non IRS  income tax return for tax filers who are unable to obtain a free copy of their  tax account information. Which tax authorities charge a fee to obtain this  information?

  DOC-A28. The tax authorities for Guam, the Commonwealth of the  Northern Mariana Islands, the Commonwealth of Puerto Rico and the U.S. Virgin  Islands charge a fee to obtain tax account information. Therefore, a tax filer  who filed an income tax return with these tax authorities may provide  institutions with a signed copy of his or her income tax return that was filed  with the relevant tax authority. However, if the institution questions the  accuracy of the information on the signed copy of the income tax return, the  tax filer must provide the institution with a copy of the tax account  information issued by the relevant tax authority before verification can be  completed.

  A tax filer who filed an income tax return with the Internal  Revenue Service or the tax authority for American Samoa must provide  institutions with a copy of his or her tax account information if selected for  verification since these tax authorities do not charge a fee to obtain this  information.

  A tax filer who filed an income tax return with tax authorities  not mentioned above, i.e. a foreign tax authority, and who indicates that he or  she is unable to obtain the tax account information free of charge, must  provide the institution with documentation that the tax authority charges a fee  to obtain that information, along with a signed copy of his or her income tax  return that was filed with the relevant tax authority. [Guidance issued  6/7/2016]

 DOC-Q29. Since a Social Security Number, an Individual Taxpayer  Identification Number, or an Employer Identification Number is required to  obtain a verification of nonfiling from the IRS, how can a nontax filer without  one of these identifiers meet the verification requirement to obtain  confirmation of nonfiling from the IRS?

  DOC-A29. We are aware of circumstances where one or both of the  parents of a dependent student or the spouse of an independent student does not  have a Social Security Number, an Individual Taxpayer Identification Number, or  an Employer Identification Number and therefore is unable to obtain a  verification of nonfiling from the IRS. Individuals in these cases and whose  income is below the IRS filing threshold must submit to the institution:
- A signed and dated  statement--       - Certifying that the individual(s) does not  have a Social Security Number, an Individual Taxpayer Identification Number, or  an Employer Identification Number; and
  - Listing the sources and amounts of earnings,  other income, and resources that supported the individual(s) for the  appropriate tax year; and 
- If applicable, a copy  of IRS Form W–2 for each source of employment income received for the  appropriate tax year or an equivalent document.

**Note:** Individuals who  submit W-2s that total a gross income that equals or exceeds the IRS tax filing  threshold must request a Social Security Number, an Individual Taxpayer  Identification Number, or an Employer Identification Number and file an income  tax return before the student is eligible to receive Title IV aid. [Guidance  issued 10/6/2016; **and applies beginning with the 2017-2018 award year**]

  DOC-Q30. The Department has provided guidance on how to obtain  verification of non-filing from the IRS. What do individuals who are subject to  foreign tax authorities do?

 DOC-A30. If another tax authority can provide documentation  similar to the IRS that indicates the individual did not file taxes for the  appropriate tax year, we expect the individual to request such documentation  and provide it to the institution. If such documentation does not exist, or if  the individual is unable to obtain the documentation, the institution may  accept a signed and dated statement from the individual stating either that the  tax authority does not provide such documentation or that the individual was  unable to obtain the documentation after contacting the tax authority.

 Since nontax filers selected for verification are already  required to provide a signed and dated statement related to their claim of  being a nonfiler, those nontax filers may also include in that statement the  attestation specified above. [Guidance issued 1/13/2017; **and applies  beginning with the 2017-2018 award year**]

 DOC-Q31. Must an institution collect documentation of an  applicant’s high school completion status for graduate students placed in  Verification Tracking Groups V4 or V5?

 DOC-A31. An institution is not required to collect proof of high  school status if admission into the graduate program requires the completion of  at least two years of undergraduate coursework as provided in Q&A RED-Q1/A1. [Guidance issued 1/13/2017]

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**Changing Applicant's FAFSA Information (CHD)**

CHD-Q1. Is an institution required to submit changes to a FAFSA  dollar item that is less than $25 if the institution has to submit a change to  a nondollar item? What if the other item is a dollar item where the change is  $25 or more?

CHD-A1. Yes. If an institution is required to submit any change  as a result of verification it must submit all changes. For example, if there  is a change in number of family members and also a change in the Education  Credit amount of only $15, the institution must submit both changes to the CPS  even though the difference in the amount of the Education Credit is less than  the $25 tolerance. Likewise, if, for example, the difference for AGI is $100,  and the difference for taxes paid is $20, the institution must submit both the  AGI and the taxes paid changes, not just the AGI change that exceeded the $25  tolerance. [Section 668.59] [Guidance issued 06/21/2012]

CHD-Q2. Since IRA rollovers are not reflected  on the IRS Tax Return Transcript or transferred into an online FAFSA using the  IRS Data Retrieval Process, is changing the FAFSA to reflect the rollover  exclusion a "correction," an "update" or "professional  judgment?"

CHD-A2. Archived

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