Posted Date:May 4, 2016
| Author: | Jeff Baker, Director, Policy Liaison and Implementation, Federal Student Aid |
Subject: Revised 2016-2017 FAFSA Verification-IRS Tax Return Transcript Matrix
On March 23, 2016 we posted the 2016-2017 FAFSA Verification-IRS Tax Return Transcript Matrix that institutions can use for 2016-2017 verification of tax return information. Since publication several institutions have noted that the matrix may not have accurately described which lines from an IRS Tax Return Transcript for Income Tax Paid should be used for verification. This inaccuracy was the result of different placements on the IRS transcripts of certain taxes and credits that are related to the taxpayer’s enrollment (or lack of enrollment) in an approved health insurance program as provided for in the “Affordable Care Act” (ACA). We note that only a small number of taxpayers are impacted by these ACA taxes and credits.
Under provisions of the Higher Education Act (HEA), taxes and credits related to the ACA are not to be included in the amount of U.S. Income Tax that is used in the calculation of a student’s expected family contribution (EFC). Unfortunately, the information provided on the matrix that was published on March 23rd, did not correctly address these differences on the IRS Tax Return Transcripts. The column titled 2015 IRS Tax Return Transcript Item from the Revised 2016-2017 FAFSA Verification-IRS Tax Return Transcript Matrix that is attached to this Electronic Announcement provides the correct information.
We expect institutions will use the information in the revised matrix beginning no later than May 4, 2016.
We apologize for any inconvenience our earlier posting may have created.