Although the U.S. Department of Education announced earlier this year that institutions may accept a signed copy of an individual’s tax return for verification the 2021-2022 award year, some students and families may still submit an official IRS Tax Return Transcript to your office for verification. It’s helpful to know which line items from the tax return, the tax transcript, and the FAFSA and ISIR correspond. Click the link below to download a copy.

2021-2022 IRS Tax Return And Transcript Matrix For FAFSA Verification

The post GET YOUR 2021-2022 IRS TAX RETURN AND TRANSCRIPT MATRIX FOR FAFSA VERIFICATION appeared first on Higher Ed Executives.

In the first update, ED provided guidance for when a school can accept a signed statement from a student, spouse or parent to verify that they did not file a Federal Income Tax Return. According to the updated 20-21 Application and Verification Guide, Individuals who can’t get a VNF letter from the IRS (or other tax authority) may instead submit a signed statement as long as the school has no reason to question the student’s or family’s good-faith effort to acquire the letter. Form 4506-T states that most requests are processed within 10 business days, so at least that amount of time should elapse before schools resort to a signed statement. Also, since a VNF must be dated on or after October 1, 2019, the statement cannot be signed and used before then either. (See Chapter 4, P. AVG-98. “Individuals who can’t get a VNF letter.”)

The statement must assert that the person attempted but was unable to get the VNF. For non-tax filers, the statement must also confirm that they have not filed and are not required to file a tax return for the relevant year, and it must list the sources and amounts of income earned from work. For extension filers, the statement must also confirm that they have not yet filed a return for the tax year and must list the sources and amounts of income; if they are self-employed, it must include the amount of AGI and U.S. income tax paid. Note that in both cases—for non-tax filers and extension filers—the other required documentation (e.g., W-2 forms) must still be provided.

In the second update, ED officially rescinded guidance issued in several Dear Colleague Letters related to the Financial Aid Office’s use of Professional Judgment for students and families receiving unemployment benefits. The Department specifically rescinded guidance in GEN-09-04, GEN-0905 and GEN-11-04. In the June 12, 2020 Errata and Updates notice ED says they removed the last sentence on the page “because it referenced outdated guidance”, confirming that ED no longer considers GEN-09-04 and GEN-09-05 to be in effect for the 2020-2021 award year. See FSA HB AVG Chapter 5, Page 125.

The post UPDATES ON VERIFICATION OF NON-FILING AND USE OF PROFESSIONAL JUDGMENT FOR 2020-2021 appeared first on Higher Ed Executives.