FAFSA Tax Information Requirements

You will need to submit your tax return transcript for FAFSA before you can submit your application. According to changes made by FAFSA, you are now required, when filling out a form, to report your income information from an earlier tax year.

When you provide FAFSA with your tax information, you are providing financial information for you and your family. Therefore, you must be as accurate as possible and be sure to submit all that is needed information.

You may be concerned that submitting your tax information will be overwhelming and time-consuming. However, with the FAFSA data retrieval tool (IRS DRT), your tax information is automatically transferred to your FAFSA form. Meaning, that you can spend more time deciding which colleges to apply instead of stressing that you are not adding the right tax information to your application. However, if preferred, you can add your tax informational manually.

Can I submit a FAFSA application without a tax return?

You may be wondering how to fill out FAFSA without a tax return if you plan to apply for federal student aid. Simply put, you can apply for FAFSA without a tax return if:

  • You are a dependent student applying for FAFSA who did not file a tax return, but your parents did.
    • Answer “Not Going to File” on the form then enter the income your parents earned.
  • You are an independent student who did not file a tax return.
    • Answer “Not Going to File” and skip the questions about tax income, such as exemptions and adjusted gross income.
  • Both you and your parents did not file a tax return.
    • Answer “Not Going to File” and skip the questions about your income tax, adjusted gross income and exemptions.
  • You or your parents got an extension or suspension on filing a tax return.
    • Request an Application for Automatic Extension of Time To File (IRS Form 4868).
    • An authorized suspension of filing form

It is essential that you know that if you or your parents should have filed a tax return but did not that this is known as an “unauthorized failure to file.” Meaning, that you would not meet the eligibility requirements for federal student aid.

 Now that you know the IRS FAFSA requirements for how to apply without a tax return, let’s take a look at how to submit your tax information when you do have a tax return.

How to Provide Tax Information on a FAFSA Application

Before you look for the FAFSA link to IRS, you will need to know what information you will need to provide on your FAFSA application. When filling out a FAFSA application, you will need to provide specific information about your financial records, such as tax forms and your savings and checking account balances.

Related Article: Receiving Your Federal Student Aid

It is essential that you know that you must report income information from an earlier tax year than the year of the FAFSA form. However, if your family’s financial situations have drastically changed since taxes were filed, you must answer the FAFSA questions as required. Then, you must submit the form and contact the school you wish to attend immediately to discuss your finances with the financial aid office.

What is the Internal Revenue Service Data Retrieval Tool (IRS DRT)?

You may be curious about how to use the IRS DRT FAFSA to submit your tax return information. The IRS DRT automatically transfers you or your parent’s tax information into your FAFSA form with the click of a button. If this feature is offered to you, you should use it, as it is extremely beneficial and retrieves your information instantly. Also, the information is correctly added to your form, so you do not need to worry about any mistakes.

Note: You can find out when your tax information will likely be available if you got an extension on filing your taxes by using the IRS DRT system.

How to Use the IRS DRT on a FAFSA Application

To submit your tax transcript for FAFSA through the IRS DRT, you must do so through the FAFSA website. Then, you must follow the below steps:

  1. Start a new application or log into your current FAFSA form with your FSA ID.
  2. Click the “Link to IRS” button on the finances section of the online FAFSA form, if eligible. Then, you will be transferred to the IRS to retrieve your tax information.
  3. Next, select the “Transfer My Tax Information into the FAFSA Form” box. Lastly, select the “Transfer Now” button.

You will be able to tell if the FAFSA IRS retrieval tool is successful and if your tax return information is transferred when you see the words “Transferred from the IRS” displayed in the area of the IRS information in your FAFSA form. To keep your financial situation protected, your tax return information will not display on either the FAFSA or IRS website. However, if you enter your tax information manually, you will be able to see your tax information.

Note: Both students and parents can access the IRS DRT.

Can I change the tax return info that is transferred from the IRS DRT?

Once your FAFSA tax return information is transferred from the IRS DRT to your FAFSA application, the information cannot be changed. However, if your financial situation has changed or you have filed an Amended U.S. Individual Income Tax Return (Form 1040X), you will need to contact your school’s financial aid office to discuss if it would be suitable for the school to adjust the tax information on your FAFSA application.

Can I clear the tax information transferred from the IRS DRT?

If your FAFSA income tax information is transferred from the IRS DRT to your FAFSA form, you may want to know what to do if you decide to enter the information manually instead. It is important to note that FAFSA strongly discourages this action since the IRS DRT is the most accurate and fastest way to input your tax return information into your FAFSA form.

However, FAFSA tax return requirements state that you can clear the tax information transferred by the IRS DRT and enter it manually if necessary, but only if the application has not been submitted. To do so, you must select the “Clear All Data” button at the top of the page. You can also click the “Reset FAFSA” button from the menu located at the upper right of the mobile app. Furthermore, when you clear the data, the entire application or correction will be cleared, and you will need to start an entirely new application or correction.

Related Article: How to Correct or Update a FAFSA Form

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