NASFAA's Using Federal Tax Returns in Need Analysis is now available for the 2009-10 award year and has been updated with in changes made by the College Costs Reduction and Access (CCRAA). This update to the annual reference tool on how to use federal income tax returns, forms, and schedules in Need Analysis includes:

• Changes to the Need Analysis untaxed income data elements mandated by the CCRAA of 2007 that are effective for 2009-10 award year;

• Cross-references in the "Tax Forms and Schedules Comparison" and "Guide to Implied Income and Assets" charts to the appropriate 2008 IRS tax forms and line items, as well as to the applicable 2009-10 FAFSA questions; and

• A section on the use of W-2 forms for verifying certain sources of income that may not be accurately reported on the FAFSA.

Note that effective for 2009-10, the Earned Income Credit (EIC), Additional Child Tax Credit, Welfare Payments, and the untaxed portions of Social Security benefits are no longer considered untaxed income for determining an applicant's eligibility for Title IV aid. As such, they are excluded from the calculation of the Expected Family Contribution (EFC) and may not be included as a resource in the calculation of need [Cost of attendance (COA) - Estimated Financial Assistance (EFA) = Need]. In addition, the Department of Education (ED) had not issued guidance on the treatment of the 2008 Recovery Rebate Credit at the time these materials were updated.

Using Federal Tax Returns in Need Analysis is available on the NASFAA Web site as a PDF document. It is a benefit of NASFAA membership and requires a Web site ID to access.

By Stacey A. Peterson NASFAA Associate Director of Professional Assessment, Training, and Regulatory Assistance

Posted 02/02/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.