Posted Date: November 26, 2019

Author:  Federal Student Aid

Subject: 2020-2021 FAFSA Verification-IRS Tax Return Transcript Matrix

Attached to this Electronic Announcement is the 2020-2021 FAFSA Verification-IRS Tax Return Transcript Matrix that institutions can use for 2020-2021 verification of tax return information. There have been significant changes to IRS tax form line items which are included in this tax matrix.

Since the IRS Tax Return Transcript does not have line or item numbers and uses wording that may be different from what is used on the FAFSA, this matrix may help financial aid administrators map 2018 IRS Tax Return Transcript information to FAFSA/ISIR data. The first column of the matrix lists the six 2020-2021 FAFSA information items that, consistent with the May 24, 2019 Federal Register notice and the Dear Colleague Letter GEN-19-02 posted on June 7, 2019, may need to be verified for a student or parent who indicated that they did or will file a 2018 IRS tax return.

The second column displays the student and parent FAFSA question number for each item. The third column displays the student and parent ISIR item number. ISIR numbers are from the 2020-2021 Electronic Data Exchange (EDE) Technical Reference. The fourth column of the matrix is the item name as displayed on the IRS Tax Return Transcript. Note that for some verification items the transcript may display two or three values. If only one value is displayed on the transcript, that value must be used for verification. If more than one value is displayed on the transcript, the value associated with the item name that includes the words “Per Computer” must be used for verification. The “Per Computer” line should be used for verification even if it is different than what was reported by the tax filer. The last column shows the corresponding line item numbers from the 2018 IRS 1040 tax return. It should be noted that for the 2018 tax year, IRS forms 1040A and 1040EZ were eliminated and therefore, no longer appear on this tax matrix.

Under provisions of the Higher Education Act (HEA), taxes and credits related to the Affordable Care Act (ACA) are not to be included in the amount of U.S. Taxes Paid that are used in the calculation of a student’s expected family contribution (EFC).

It should also be noted the tax transcript format has been revised to accommodate use in reporting 2018 tax return information as well as tax return information for tax years prior to 2018. For example, prior to the 2018 tax year, IRAs appeared on a separate tax line from pensions and annuities. However, for the 2018 tax year, IRAs, pensions, and annuities were combined on the tax return. Therefore a tax transcript for a 2017 tax return may list an IRA distribution separately from pensions and annuities while a transcript for a 2018 tax return may report IRA, pensions, and annuities as combined.

Attachments/Enclosures:

2020-2021 FAFSA Verification - IRS Tax Return Matrix in Microsoft Excel Format, 48KB

   

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