Financial Aid IRS Data Retrieval System

Federal Student Aid and the Internal Revenue Service collaborated to develop a solution that simplifies FAFSA completion. The IRS Data Retrieval tool will allow Free Application for Federal Student Aid (FAFSA) on the web applicants to request and retrieve their income and tax data from the IRS. The IRS Data Retrieval System (DRS) allows students and parents to access the IRS tax return information needed to complete the FAFSA. Students and parents may transfer the data directly into their FAFSA. We highly recommend using the tool as it is aneasy way to provide tax data and ensures FAFSA has accurate tax information. Please note, if you do not use the IRS Data Retrieval Tool to provide tax information, you may be required to obtain an official tax transcript from the IRS. This can take some time to receive the tax transcript.

When can I use the Data Retrieval System?

For the 2012-2013 academic year, the IRS data retrieval process is tentatively scheduled to be available February 1, 2012. Electronically filed tax return information will be available online from the IRS site in 1-2 weeks after the return has been filed. Data from paper tax returns will be available in 6-8 weeks.

Who CAN & CAN'T use the Data Retrieval System

You CAN us the IRS Data Retrieval System if:

• Must have valid SSN
• Must have filed a 2011 federal tax return (within the time frames below)
• Must NOT have changed marital status since December 31, 2011

• 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 indicated on the FAFSA they have not already filed a tax return or will not file a tax return.
• If the student (and spouse if applicable) or parent filed as Married filing separately tax returns. You CAN do the data retrieval for one (parent/student) and not the other (parent/student).
• The applicant, parent, or spouse, as applicable, who have filed an amended tax return

Estimating Taxes and FAFSA Corrections

Since you can complete the FAFSA beginning January 1st (of the year for which you need aid) and because some financial aid is awarded on a first-come, first-served basis, you still have the option of estimating taxes for the FAFSA and manually entering your data.

Starting around April 1, 2012, Federal Student Aid will send notifications to remind you that once you have filed your income tax return, you should use the FAFSA corrections process to update your FAFSA using the FAFSA IRS Data Retrieval process.

If you choose not to use the FAFSA IRS Data Retrieval process or retrieve IRS data but subsequently change it, you will need to explain to your institutions why information you provided is more accurate than the information that would have been obtained directly from the IRS. If you elect to not use the retrieval process, you will be subject to being selected for verification. If selected for verification, you will be required to support your reported FAFSA data with information obtained directly from the IRS. For more information about the IRS Data Retrieval tool, please log back into www.fafsa.ed.gov.

How the Student IRS DRT works:

1. Enter your PIN and click Link To IRS. (You will not be asked to enter your PIN if you entered a PIN to begin your FAFSA.)
2. Your FAFSA will be saved and you will be transferred to the IRS Web site.
3. On the IRS Web site, enter the requested information. . Make sure you enter info EXACTLY as it would be on your tax return (example: if you filed as 2nd street don't enter in Second Street).
4. Once the IRS has validated your identification, your IRS tax information will display. You can either transfer your information from the IRS, or choose to return to FAFSA on the Web from the IRS Web site. If you do not transfer your information or choose not to return from the IRS Web site, you will have to login to open your saved FAFSA.
5. If you transfer your IRS tax information, questions that are populated with tax information will be marked with "Transferred from the IRS." See screen example below. You must be able to select "Already completed" to use the DRS.

How the Parent IRS Data Retrieval Tool works:

1. Enter your PIN and click Link To IRS
2. Your FAFSA will be saved and you will be transferred to the IRS Web site.
3. On the IRS Web site, enter the requested information. Make sure you enter info EXACTLY as it would be on your tax return (example: if you filed as 2nd street don't enter in Second Street).
4. Once the IRS has validated your identification, your IRS tax information will display. You can either transfer your information from the IRS, or choose to return to FAFSA on the Web from the IRS Web site. If you do not transfer your information or choose not to return from the IRS Web site, you will have to login to open your saved FAFSA.
5. If you transfer your IRS tax information, questions that are populated with tax information will be marked with "Transferred from the IRS."
6. See screen example below. ( you must select "Already completed" in order for the IRS link to appear



7. Click on "None of the above" and you will see a pop-up screen that allows you to enter your PIN and link to the IRS website.

IRS DRS Screen Shots

Oh no, they do not have my tax returns yet! Continue to see why I might be receiving this screen

Joe & Jane Smith did file their returns and can use the DRS. This is the screen they saw:

Benefits of using the tool:

• Applicants can complete their FAFSA more easily and accurately!
• The tool will increase the accuracy in the awarding for student financial aid funds!
• Applicants selected for verification can use the tool to update their income information and avoid unnecessary processing delays!

Why Can't I use the IRS Data Retrieval Tool if I file a tax return outside the U.S.?

If you did not file a Federal IRS tax return, you cannot use the IRS Data Retrieval Tool because there is no information on file with the IRS for you to view and transfer.

If you filed both a Federal IRS tax return and a Puerto Rican or foreign tax return, you will only be able to view and transfer your Federal IRS tax return information if you link to the IRS Web site. Therefore, your IRS tax return information may not completely reflect what you need to report on the FAFSA.

Why can't I use the IRS Data Retrieval Tool if I am married and filed taxes separately from my spouse?

If you are married and filed taxes separately from your spouse, you will only be able to view and transfer your own tax return information if you link to the IRS Web site. Therefore, your IRS tax return information may not completely reflect what you need to report on the FAFSA. Some of the questions (like Adjusted Gross Income) are made up of income from 2 people but there is only one place to put the total on the FAFSA.

Why can't I use the IRS Data Retrieval Tool if I filed an amended tax return?

The IRS Data Retrieval Tool allows users to link to the IRS Web site and securely transfer original IRS tax return information into their FAFSA, but not amended tax return information.

Why can't I use the IRS Data Retrieval Tool if I filed as Head of Household?

You only see this option if you answer "Married" to your marital status on the FAFSA. If you said you were married on the FAFSA AND can check of "Head of Household" on the Data Retrieval Screen (see screen shot example above) this means that you filed separate taxes from your spouse. Certain questions on the FAFSA are totals of the incomes of two people (like Adjusted Gross Income). There is only one place to put this answer on the FAFSA. The IRS DRS will only pull over info for one tax return. This would make the answers incorrect on the FAFSA because you would be missing data from the other person.