Details on the New IRS Data Retrieval for the FAFSA

The Department of Education's Office of Federal Student Aid (FSA) and the Internal Revenue Service (IRS) have collaborated to develop a long-awaited improvement that simplifies FAFSA completion. During a recent Negotiated Rulemaking session on program integrity, and at the FSA Conference, the Department of Education shared details of the new IRS Data Retrieval tool, which will allow FAFSA on the Web applicants to request and retrieve their income and tax data from the IRS online. Once the data is retrieved from the IRS, it can be transferred to the FAFSA application.

The basic steps in the process are these:

At the FAFSA Web site, the applicant selects "Fill Out Your FAFSA."
The system displays the option to access the IRS Data Retrieval Tool.
The applicant will authenticate using the FSA PIN.
The system displays the "Get My Federal Income Tax Information" function on the IRS web site.
If the IRS authenticates the taxpayer, federal income tax data for the prior year appears.
The applicant has the option to select "Transfer Now." If chosen, the IRS data is transferred, the IRS session ends, and the system returns the applicant to the FAFSA session, now populated with IRS data.
Students and parents need to perform this process independently.

IRS Data Retrieval Implementation Schedule

The 2009-10 IRS data share will be implemented in January 2010 for students applying for the remainder of the current academic year. This functionality is a pilot program to test proof of concept, with only selected applicants seeing the option. Among these, applicant participation is voluntary, and available on initial and renewal applications entry only.

The 2010-11 IRS data share will be implemented in the Summer of 2010 for next year's applicants. The IRS option will be fully implemented and available to all applicants for 2010-11 after that time. Applicant participation is voluntary. The option will possibly be extended to include Correction on the Web entries.

2009-2010 IRS Data Retrieval Details

The CPS will apply comment codes to indicate that the student and/or parent transferred IRS data into the FAFSA. Comment codes will appear in the FAA Information section of the ISIR; the Student Inquiry section of FAA Access. The Comment codes will be set based on certain conditions.

2010-2011 IRS Data Retrieval Details

An IRS Request Flag will appear as follows:

00 - IRS data request for the student/parent was not submitted to IRS (default value)
01 - IRS data request for the student/parent was sent to IRS
02 - IRS data for the student/parent was returned from the IRS and was not changed by the user
03 - IRS data for the student/parent was returned from IRS and was changed by the user
04 - IRS data for the student/parent was transferred from the IRS and on a correction entry at least one IRS data field was changed by the user
05 - (under construction) IRS data for the student/parent was transferred from the IRS but may be incomplete based on marital status and tax filing status
06 - (under construction) IRS data for the student/parent was transferred from the IRS but marital status conflicts with tax filing status

More 2010-2011 IRS Data Retrieval Enhancements Under Consideration

Additional enhancements to the process are under consideration for the 2010-11 and may be phased in. They include the ability to receive "Tax Filing Status" from IRS as part of data retrieval and transfer process; and adding a Spanish language version or enable Spanish filers to use retrieval process.

Posted 12/04/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.