Tax transcript tips from the IRS
Read more on options for obtaining tax information for FAFSA verification purposes.
Office of Scholarships and Financial Aid Verification Policy
Verification is a federal review process required to confirm the accuracy of information reported on the Free Application for Federal Student Aid (FAFSA). NAU’s philosophy is that financial aid should be accurately awarded to students based on their need. To this end, under the auspices of the Department of Education, the Office of Scholarships and Financial Aid (OSFA) strives to administer efficient application and verification processes to ensure accuracy and integrity in determining eligibility for students and the awarding of funds.
Please note that the information below is specific to students selected for verification for the 2020-2021 aid year. If a student is selected for verification for the 2019-2020 aid year, they will be asked to submit documents for the 2017 tax year.
Verification documents Accordion Closed
Students selected for 2020-2021 verification are required to submit any combination of the following, with each student’s specific requirements listed on the LOUIE To-Do List:
- Verification form (Blue, Gold, or Sage)
(Go here to determine if you are dependent or independent for purposes of the FAFSA.)
- Student 2018 tax return transcript (and tax account transcript if an amended return was filed)
- If you are unable to obtain a tax transcript, a signed tax return is acceptable
- Student W2(s)
- Parent 2018 tax return transcript (and tax account transcript if an amended return was filed)
- If you are unable to obtain a tax transcript, a signed tax return is acceptable
- Parent W2(s)
- Verification of Non-Filing Letter (VONF) – parents and independent students only
Tax return transcripts are different from copies of a federal tax return; transcripts are an official record of the information on file with the IRS. Tax return transcripts and Verification of Non-Filing must be obtained from the IRS through one of the following methods:
- Get Transcript Online – Go to www.irs.gov, click “Get My Tax Record.” Click “Get Transcript Online.” Create an online account or log in with your current account. Make sure to request the “IRS Tax Return Transcript” and NOT the “IRS Tax Account Transcript.”
- Get Transcript by Mail – Go to www.irs.gov, click “Get My Tax Record.” Click “Get Transcript by Mail.” Provide your SSN, Date of Birth, and Street Address. Make sure to request the “IRS Tax Return Transcript” and NOT the “IRS Tax Account Transcript.”
- Automated Telephone Request – 1-800-908-9946
- Paper Request Form – IRS Form 4506T-EZ (for Individual Tax Return Transcript) or IRS 4506-T (for Tax Return Transcript, Verification of Non-Filing, or W2s)
Tax return transcripts are preferred, however, if you are unable to obtain, a signed tax return will suffice.
Verification documents should be submitted in one submission to OSFA via the secure document upload here: nau.edu/OSFAdoc-upload (preferred) at email@example.com, mail, or in-person. Incomplete documents will not be processed and will be shredded for security purposes.
Process Accordion Closed
1. The Department of Education selects students for verification; once NAU receives students’ FAFSAs, OSFA updates their respective LOUIE To-Do Lists with items they must submit to OSFA. Students receive an email and a letter with this information. They will also receive reminder notifications every two weeks.
Selection: Not all students are selected for verification, nor are the same students selected each year. Students may never be selected, may be selected only one year, or may be selected every year. This is out of NAU’s control.
Professional judgment: NAU is mandated to complete verification for a selected student before exercising professional judgment to adjust any values that are used to calculate the EFC, i.e. before reviewing a student/parent contribution appeal. However, making a professional judgment does not require OSFA to verify an application that is not selected.
Throughout the verification process OSFA staff may find that additional information is required beyond what was previously requested. This new request will be emailed to the student and added to his/her LOUIE To Do List.
2. OSFA requests that students submit the necessary documentation (listed above) within 30 days of receipt of the first notification. Once received, documents can take up to 10 business days to be logged to a student’s account. This is especially true during peak times.
Submission deadline: Students must submit all verification documents by the earlier of 120 days after the last day of enrollment or by the deadline published in the Federal Register (generally mid-September following the end of the aid year). Verification is considered complete when all requested documentation has been received, all errors corrected, and a valid FAFSA/ISIR is on file. If required verification documentation is not submitted by the deadline, the student will not be eligible for any Title IV aid for the period of time the FAFSA was used to determine eligibility.
Late disbursement: Once a student is no longer enrolled, the student may still submit verification documentation (by the deadline above) and receive a late disbursement if, during the period of enrollment, the U.S. Department of Education had processed a FAFSA with an official Expected Family Contribution (EFC). If the EFC changes based on the documentation received, any Pell Grant award will be based on the higher EFC. Pell Grant recipients are subject to certain Lifetime Eligibility Used (LEU) restrictions.
3. Once all verification documents are received, NAU will review each student’s file in the order in which it was completed. The verification process can take up to 15 business days. If corrections to the FAFSA must be made, a final file will come back from the Department of Education within 10 business days. Students will receive an email if corrections result in a change to the EFC.
4. Once the FAFSA is finalized, awarding and disbursement can take place.
Awarding for incoming freshmen: Incoming freshmen may be awarded prior to the completion of the verification process. Awards will post to their LOUIE accounts but will not disburse the following August until verification is complete. Awarding begins in December for the following academic year and continues every Friday. Once verification is complete, awards may be adjusted depending on corrections made to each student’s file. Students will receive an automated email if changes were made to their awards on LOUIE.
Awarding for transfers and continuing students: Transfer will be awarded starting in early spring and continuing students will be awarded in early-to-mid June, after spring grades post and after verification is complete.
5. Disbursement of funds occurs no sooner than 10 days before the start of each term. Disbursements are never made until verification is complete.
Errors when reporting assets Accordion Closed
A common error when filing the FAFSA is to report incorrect amounts in the student, spouse, and/or parent assets. Here’s what should and should not be reported for each of the asset questions:
- Total balance of cash, savings, and checking accounts
Do not include: student financial aid, which includes private alternative loans
- Net worth of investments
Include: real estate, rental property (includes a unit within a family home that has its own entrance, kitchen, and bath rented to someone other than a family member), trust funds, UGMA and UTMA accounts, money market funds, mutual funds, certificates of deposit, stocks, stock options, bonds, other securities, installment and land sale contracts (including mortgages held), commodities, etc. Investments also include qualified educational benefits or education savings accounts (e.g., Coverdell savings accounts, 529 college savings plans and the refund value of 529 prepaid tuition plans).
Do not include: the home you live in, the value of life insurance, retirement plans (401[k] plans, pension funds, annuities, non-education IRAs, Keogh plans, etc.) or cash, savings, and checking accounts already reported in the previous question on this form. Investments also do not include UGMA and UTMA accounts for which parents are the custodian, but not the owner.
- Net worth of current businesses and/or investment farms
Include: market value of land, buildings, machinery, equipment, inventory, etc. Business and/or investment farm debt means only those debts for which the business or investment farm was used for collateral.
Do not include: the value of a small business if your family owns and controls more than 50% of the business and the business has 100 or fewer full-time or full-time equivalent employees. For small business value, your family includes (1) persons directly related to you, such as a parent, sister or cousin, or (2) persons who are or were related to you by marriage, such as a spouse, stepparent, or sister-in-law. Investment farm value does not include the value of a family farm that you (your spouse and/or your parents) live on and operate.
Tax filing extension Accordion Closed
An individual who is required to file a 2018 IRS income tax return and has been granted a filing extension by the IRS, must provide:
- A copy of IRS Form 4868, “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return,” that was filed with the IRS for tax year 2018;
- A copy of the IRS’s approval of an extension beyond the automatic six-month extension if the individual requested an additional extension of the filing time for tax year 2018;
- Verification of Non-filing Letter (confirmation that the tax return has not yet been filed) from the IRS or other relevant tax authority dated on or after October 1, 2019;
- A copy of IRS Form W-2 for each source of employment income received for tax year 2018; and
- If self-employed, a signed statement certifying the amount of the individual’s Adjusted Gross Income (AGI) and the U.S. income tax paid for tax year 2018.
Identity theft Accordion Closed
An individual who was the victim of IRS tax-related identity theft must provide:
- A Tax Return DataBase View (TRDBV) transcript obtained from the IRS, or any other IRS tax transcript(s) that includes all of the income and tax information required to be verified; and
- A statement signed and dated by the tax filer indicating that he or she was a victim of IRS tax-related identity theft and that the IRS is aware of the tax-related identity theft.
Non-IRS income tax returns Accordion Closed
Many students and parents have tax returns from U.S. territories or foreign countries.
- A tax filer who filed an income tax return with Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico and the U.S. Virgin Islands may provide a signed copy of his or her income tax return that was filed with the relevant tax authority. However, if the accuracy of the information on the signed copy of the income tax return is questioned, the tax filer must provide OSFA 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 tax authority for American Samoa must provide a copy of his or her tax account 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 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.
Untaxed income reported on FAFSA Accordion Closed
The FAFSA asks for untaxed income as a way to gather relevant income information which may not appear on a federal tax return. This helps to determine a student’s Expected Family Contribution. Use this information to complete the FAFSA, or, if requested from our office, the Unreported Income Confirmation form.
- Child support paid because of divorce or separation or as a result of a legal requirement – don’t include support for children in your household
- Child support received for any children – don’t include foster care or adoption payments
- Military and/or clergy allowance, including housing, food, and other allowances – don’t include the value of on-base military housing or the value of a basic military allowance for housing
- Veterans non-education benefits, such as Disability, Death Pension, or Dependency & Indemnity Compensation (DIC) and/or VA Educational Work-Study allowances
- Combat pay
- Grant and scholarship aid reported to the IRS as income and included in your Adjustable Gross Income, including AmeriCorps benefits (awards, living allowances, & interest accrual payments), as well as grant and scholarship portions of fellowships and assistantships
- Need-based employment, such as Federal Work-Study and need-based employment portions of fellowships and assistantships
- Co-op earnings
- Money received or paid on your behalf (e.g., bills, rent, car payments, etc.), not reported elsewhere on the FAFSA, including money received from a parent or other person whose financial information is not reported on the FAFSA and is not part of a legal child support agreement
- Other unreported income
- Other untaxed income, such as workers’ compensation, disability benefits, untaxed foreign income, etc. – don’t include extended foster care benefits, student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Innovation and opportunity Act educational benefits, on-base military housing or a military housing allowance, combat pay, benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion, or credit for federal tax on special fuels