fafsa on the web changes and irs drt - tasfaa on the web changes and irs drt isir and efc formula...

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FAFSA on the Web Changes and IRS DRT

ISIR and EFC Formula Changes

Customized/Targeted Verification

Marital Status

Parent Definition

Independent Student Status

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Start a New FAFSA

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fafsa.ed.gov

Demographic Information ◦ Social Security Card

◦ Permanent Resident Receipt Card (if applicable)

◦ Address, phone, Email

Federal Student Aid ID ◦ Student

◦ Parent

◦ https://studentaid.ed.gov/sa/fafsa/filling-out/fsaid

◦ Create a New FSA ID

Online Navigation

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Create a Password Password must be between 4

and 8 characters (any)

Help and Hints

Internet Back Arrow

Auto Save

Saved Applications – Deleted after 45 Days

Live Chat Session

System Security 3 Levels of Encryption

Close/Clear Browser

Student Eligibility

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Citizenship ◦ Alien Registration Number

High School Completion or GED

Grade Level Received Financial Aid

Highest School – Father and Mother

First Bachelor’s Degree

Work-Study Interest

Drug Conviction

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Sale or Possession

Grade level other than first year, never attended

Prior aid received

Conviction while receiving federal aid

Conviction on Record

Rehabilitation Program

High School Graduate

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High School Information ◦ Required for 2017-2018

◦ Regardless of grade level

◦ Name and Location

◦ Encouraged to Confirm but not required to proceed with application

No C-Code for High School Confirmation Process

Dependency Determination

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Prefilled from student demographic questions

Skip Logic through 8 Questions

Support Children

Active Duty

Ward of Court/Foster

Emancipated Minor

Legal Guardianship

Homelessness

Dependent – Option to Provide Parental Info.

Special Circumstances

IRS Data Retrieval Tool

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Marital Status

Unable to Retrieve Married Filing Separately

Married and either filed Head of Household

Amended Return

Puerto Rican or Foreign Return

Filed Recently – 3 or 8 Weeks

Message – Leaving FAFSA on the Web

Skip Logic

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Citizenship

High School Diploma

Grade Level

Dependency

Parent Information

IRS Data Retrieval Tool

Financial Data Tax Return Filed

Untaxed Sources

Dislocated Worker

Receipt of Federal Benefits

Income Exclusions

Assets

Assets

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Simplified Needs Analysis

Asset Protection Allowance

Reporting Assets

Assets Not Included

Skip Logic Type of Tax Return

Eligible to File 1040A/EZ

Total Assets as of FAFSA Filing Date

Dislocated Worker

Receipt of Federal Benefits

Help Topics – Need Help?

Confirmation - Results

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Instructions

Hyperlinks

Confirmation Number

Data Release Number

Estimated EFC

Estimated Pell and Loans

College Rates

Federal Student Aid Center Contact Information

Institutional Student Information Record (ISIR)

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Institutional Result of FAFSA Filing

Sent to Listed Schools Electronically

Cover Letter – Comment Codes

Reported Data

Calculation Results

Verification Status

Database Match Flags

NSLDS Data

Verification Information

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CPS Selection

EFC – Asterisk

Verification Flag Y = Selected for verification

N = No selected

* = Selected on a subsequent transaction

Verification Tracking Flag V1 = Standard Verification

V4 = Custom Verification

V5 = Aggregate Verification

Blank = Not selected for verification

Transaction & Processing Codes

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EFC Type

Source of Correction

Reprocessing Code

Processed Record Type

CPS Pushed ISIR

Dependency Override

Electronic Transaction Indicator (ETI)

Correction # Applied To

Intermediate Values

Signature Reject EFC

Rejects and Assumptions

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Reject Codes

Reject Reasons

Rejects Met

Assumption Codes

Signature Rejects

NSLDS Pell History

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Postscreening Reason Codes

Overpayment Flag

Pell Lifetime Eligibility Used

Pell Lifetime Limit Flag

Pell Payment Data

NSLDS Professional Access Web site – nsldsfap.ed.gov

NSLDS Loan History

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Default, Discharge, Fraud, and Active Bankruptcy Flags

Loan Satisfactory Payment Arrangement Flag

Loan Details

Annual and Aggregate Loan Limits

Master Promissory Note

Lender, Servicer, and Guaranty Agency Contact Codes

NSLDS Unusual Enrollment Flag

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NSLDS Financial Aid History Section

Unusual Enrollment Flag

Resolution Required

Codes 2 and 3

What is the EFC?

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Federal Methodology

Cost of Attendance

Expected Family Contribution

FAFSA Data

Federal Eligibility

Pell Grant

Direct Loans

Campus-Based Programs

State Grant Programs

Institutional Aid Programs

Title IV of HEA – Part F

Federal Register/Volume 81, No. 152, 08/08/2016

EFC Worksheets

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Formula A, B, C – Regular and Simplified Dependent

Independent without dependents

Independent with dependents

Total Taxed and Untaxed Income

Income Exclusions

Allowances Against Income

Contribution from Assets

Calculations Carried Three decimal places –

Rounded up for .500 - .999

Rounded down for .001 - .499

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FAFSA Definitions

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Status as of Date Signed

Current Status – Divorced then Remarried

Separation

Reporting Student Status

Data Reported

IRS Marital/Filing Status

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Single

Unmarried

Divorced

Widow(er)

Head of Household

Considered Married – Last Day of Tax Year

Married Living Apart

Divorce and Remarriage

Annulled Marriage

IRS Publication 17

Head of Household (HOH)

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Considered Unmarried

File a Separate Return

Pay more than 50% of Costs to Keep up Home

Support Test

Qualifying Person

Exemption Claimed

Temporary Absences

Nonresident Alien Married to US Citizen

Benefits of Filing HOH:

Higher Standard Deduction –

$6300 for Single and $9250 for HOH

Lower Tax Rate Wider Income brackets

Refundable Earned Income Credit

Nonresident Alien – Chapter 1, Publication 519

Divorced or Separated

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Divorce

Separation

Documenting Divorce or Separation

Proof of Separate Addresses

Divorce Decree

Legal Separation Court Document

States Recognizing Legal Separation

Separation - Cannot File Taxes as Single

LEGAL SEPARATION NOT RECOGNIZED:

Delaware

Florida

Georgia

Maryland

Mississippi

New Jersey

Pennsylvania

Texas

Common Law Marriage

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Definition

Married Couple – All Rights

FAFSA and IRS

State Conditions

US Marriage Laws www.usmarriagelaws.com

Divorce

Documenting Common Law Marriage

STATES THAT RECOGNIZE COMMON LAW MARRIAGE:

Alabama

Colorado

Iowa

Kansas

Montana

Rhode Island

South Carolina

Texas

Utah

Washington D.C.

Resolving Marital Status Conflicting Information

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Tax Expert

FAFSA

Tax Return

Correct Filing Status

Documentation

Correcting FAFSA

Amending Taxes

Conflicting Situations

CONFLICING INFORMATION:

34 CFR 668.16(f).

34 CFR 668.54(a)(3).

34 CFR 668.61.

2012-2013 Federal Student Aid Handbook, p. AVG-80.

Publication 17

www.irs.edu

Introduction and What’s New

Part 1 – Income Tax Return

Part 2 – Income

Part 3 – Gains and Losses

Part 4 – Adjustments to Income

Part 5 – Standard and Itemized Deductions

Part 6 – Figuring Your Taxes and Credits

Tax Tables and Additional Material

1-800-829-3676

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What is a Parent?

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Dependency Status

Parents

Biological

Adoption

Stepparent

FAFSA Data

Foster Parent or Legal Guardian

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Foster Parents

Legal Guardianship

Legal Custody

Court Appointed

Temporary

Orphan, foster child, or ward of the court (53). A student

who was an orphan—both her parents were dead—when

13 or older is independent even if she was subsequently

adopted. Likewise, a student who was at any time since the

age of 13 a foster child or a ward of the court is

independent even if her status changed later.

Divorced or Separated Parent

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Divorced

Legal or Informal Separation

Separate Addresses

Residency

Financial Support

Tax Exemption

Death of a Parent

Priority Order for Divorced or

Separated Parents: 1. Which parent did student

live with more during the

12 months preceding

FAFSA completion date?

2. If live(d) with neither or

both equally, which parent

provided more financial

support during the 12

months preceding FAFSA

completion date?

3. If financial support is

exactly 50/50, which

parent has the greater

income and benefits.

Dependency Override

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Independence Criteria

Unusual Circumstances

Special Cases

Not Eligible

Parents Refuse Support or Unwilling to Provide Information

Student Demonstrates Self-Sufficiency

Not Claimed on parent Taxes

Can Include

Abandonment

Abusive Environment

Unable to Locate

Case-by-case

Dependency Override Form

Independent - Automatic Criteria

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Age –

Born before

January 1, 1994

Master’s or Doctorate Programs

Married prior to Filing FAFSA

Engaged

Divorce

Independent - Other Criteria

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Veteran of US Armed Forces or Active Duty

Support Children or Dependents (>50%)

Foster Care or Ward of the Court

Parents Deceased

Emancipated Minor

Legal Guardianship

Homelessness

Independency Documentation

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Not a Verification Requirement

Resolve Conflicting Information

C-Code Resolution

Documentation

Financial Aid Administrators Discretion

Professional Judgment

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Tracking Groups

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V1- Standard

V4 – Custom

V5 – Aggregate

GEN-16-07

(4/5/2016)

Appendix A

Appendix B

Appendix C

Changes for 2017-2018

39 DCL ID: GEN-16-07

April 5, 2016

Documentation 2016-2017

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V1 – Standard Group

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Tax Filers o Adjusted Gross Income

o U.S. Income Tax Paid

o Untaxed Portions of IRA

Distributions

o Untaxed Portions of Pensions

o IRA Deductions and Payments

o Tax Exempt Interest Income

o Education Credits

o Number of Household Members

o Number in College

Non-Tax Filers o Income Earned from Work

o Number of Household Members

o Number in College

V4 - Custom Group

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V5 Aggregate Group

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Non-Tax Filers

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GEN-16-07

Federal Register – Vol 81, No. 63 – April 1, 2016 o Signed Statement AND

o W2 Forms AND

o Confirmation of non-filing from the IRS

Conflict Resolution - 399

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GEN-16-14 – 399 Conflict Code

o Edit will pop up to FAFSA filer - Warning

o Encourage use of DRT

o Pell Eligible – Significant Change in EFC

o Resolve Conflict for both years

o Not Flagged:

o Not Pell for 17-18

o Change in Dependency Status

o Change in Marital Status

o Professional Judgment Flagged ISIRs

o 10/17/16 – Reprocessed a number of ISIRs with

incorrect 399s

Considerations and Clarification

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Verification Deadlines

Professional Judgment

Interim Disbursements

IRS Extension

Tax Return Preparer

IRS/Pension Distributions (Rollovers)

Student Communications

Conflicting Information

Electronic Signatures

IRS or Pension Rollovers:

• Excluded from EFC Calculation

• FAFSA Instructions –

Untaxed except rollovers

• DRT – Rollover unknown

Assumes untaxed

Solution (DOE Guidance):

• Applicant or FAA may modify

• Maintain documentation

• Written and signed statement

• 02 may update to 04

OK to waive Tax transcript if

only change is rollover amount

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Thank you – Any Questions?