2020-2021 Verification

On 5/24/19, ED published the federal register on verification for the 2020-2021 award year. The accompanying Dear Colleague Letter GEN-19-02 was published 6/7/19.

This article is a comprehensive article on verification for 2020-2021 and includes all of the information contained in the DCL as well as the federal register. Please note: the verification items and verification groups remain the same as 2019-2020. However, the acceptable documentation requirements have been updated in the federal register to reflect that paper copies of tax returns, including applicable schedules, are acceptable documentation for verification.

As a reminder, schools must report the results of verification of identity and high school completion status for those applicants selected for verification groups V4 and V5. This information is reported on the FAA Access to CPS Online website and is only reported for those applicants selected by ED. You should not report these results for those applicants the institution selects for verification. The results need to be reported within 60 days following your first request for verification documentation. If you need to make a change to previously reported information, the change should be reported within 30 days. You are not able to review information previously submitted. Therefore, in order to document compliance with this process, you need to print the confirmation page at the time the reporting is performed.

The following outlines the items to be verified for 2020-2021 for each verification group:

Household Size
Number in College

TAX FILERS

Adjusted Gross Income (1040 Line 7)
U.S. Income Tax Paid (1040 Line 13 minus Line 46 of Schedule 2)
Untaxed Portions of IRA Distributions and Pensions* (1040 Line 4a minus 4b)
IRA Deductions and Payments (Schedule 1 Line 28 plus Line 32)
Tax Exempt Interest Income (1040 Line 2a)
Education Tax Credits (Schedule 3 Line 50)

NON-FILERS

Income Earned from Work**

High School Completion Status
Identity/Statement of Educational Purpose***

Household Size
Number in College
High School Completion Status
Identity/Statement of Educational Purpose***

TAX FILERS

Adjusted Gross Income (1040 Line 7)
U.S. Income Tax Paid (1040 Line 13 minus Line 46 of Schedule 2
Untaxed Portions of IRA Distributions and Pensions* (1040 Line 4a minus 4b)
IRA Deductions and Payments (Schedule 1 Line 28 plus Line 32)
Tax Exempt Interest Income (1040 Line 2a)
Education Tax Credits (Schedule 3 Line 50)

NON-FILERS

Income Earned from Work**

*In previous years, Untaxed Portions of IRA Distributions and Untaxed Portions of Pensions were separate line items. However, due to the changes in the IRS tax return forms, these are now combined into one line item.

**Non-filers must provide a non-filer certification and a W-2 for each source of 2018 employment income received or an equivalent document. Additionally, non-filers must provide confirmation of non-filing status from the IRS or other relevant taxing authority dated on or after 10/01/19. However, the confirmation of non-filing status is not required for a dependent student (still applies to the parents of the dependent student).

***One of the requirements for applicants place in Verification Group V4 or V5 is to verify their identity by providing the institution with an unexpired valid government-issued photo identification. For this purpose, any unexpired valid government-issued photo identification is one that is issued by the U.S. government, any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, a federally recognized American Indian and Alaska Native Tribe, American Samoa, Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau.

HIGH SCHOOL COMPLETION STATUS

This is a reminder of the requirements for verification of high school completion status for students who have been homeschooled. If a student is selected for verification and is assigned to Verification Group V4 or V5, you must verify the student’s high school completion status. The verification documentation only needs to be obtained once and may be used in subsequent award years.

If the state where the student was homeschooled requires by law that the student obtain a secondary credential, you must obtain a copy of that credential for verification.

If the state does not require the credential, you must obtain a transcript or the equivalent signed by the student’s parent or guardian that lists the secondary courses the student completed and documents the successful completion of a secondary school education in a homeschool setting.

SPECIAL CIRCUMSTANCES

TAX RELATED IDENTITY THEFT

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; 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 has been made aware of the tax related identity theft.

Tax filers may obtain the TRDBV by calling the IRS’s Identity Protection Specialized Unit (IPSU) at 1-800-908-4490. Tax filers who cannot obtain a TRDBV transcript may instead submit another official IRS transcript or equivalent document provided by the IRS if it includes all of the income and tax information required to be verified or a signed copy of the tax return that was filed with the IRS.

AMENDED RETURNS

An individual who filed an amended return must provide a signed copy of the IRS 1040X that was filed with the IRS along with one of the following:

A transcript obtained from the IRS that lists 2018 tax account information;
IRS DRT data that was transferred and not changed; OR
A signed copy of the paper return including any applicable schedules.

NOTE: In some cases, the tax filer may not have filed a 1040X but an 07 flag is noted on the ISIR as a result of the IRS making changes. In cases of changes made by the IRS, the school can accept a copy of the IRS’ notification to the tax filer of the changes that were made instead of a 1040X. The school must still collect one of the items listed in the 3 bullets above.

FILING EXTENSIONS

An individual who is required to file a 2018 tax return and has been granted a filing extension by the IRS beyond the automatic 6 month extension must provide:

A signed certification that the individual has not yet filed a 2018 income tax return and list all sources of any 2018 income and the amount from each source;
A copy of the IRS’s approval of the extension;
Confirmation of non-filing from the IRS dated on or after 10/01/19;
A copy of IRS Form W-2 for each source of 2018 employment income received or an equivalent document; and
If self-employed, a signed statement certifying the amount of AGI and U.S. income tax paid for the tax year 2018.

Effective for the 2020-2021 award year, these individuals are no longer required to submit a copy of IRS Form 4868 that the individual filed with the IRS.

An individual who was called up for active duty or for qualifying National Guard duty during a war or other military operation or national emergency - an institution must accept a statement from the individual certifying that he or she has not filed an income tax return or a request for a filing extension because of that service.

JOINT TAX RETURNS WHEN ONLY ONE FILER’S INCOME IS USED ON THE FAFSA

If a tax filer files a joint tax return but is now separated, divorced, widowed, or married to someone other than the individual included on the 2018 joint tax return, the filer must provide:

A tax return transcript or signed copy of the tax return and applicable schedules that were filed with the IRS or other relevant tax authority; and
A copy of IRS Form W-2 for each source of 2018 employment income received or an equivalent document.

NON-FILER CONFIRMATION FROM THE IRS OR OTHER RELEVANT TAX AUTHORITY

If a non-filer is unable to obtain the required verification of non-filing status from the IRS or other tax authority, the school may accept a statement from the non-filer that they attempted to obtain the non-filing verification but were unable to obtain the required documentation.

Non-filers who do not have a SSN, ITIN, or EIN are unable to obtain confirmation of non-filing status from the IRS. These individuals are permitted to submit a signed and dated statement certifying they do not have a SSN, ITIN, or EIN and a list of all sources and amounts of earning, other income, and resources that supported the individual for the 2018 tax year. However, this will only be acceptable if their taxable income is below the IRS filing threshold.

VERIFICATION FOR APPLICANTS ELIGIBLE ONLY FOR UNSUBSIDIZED AID

Under certain circumstances, an applicant may be excluded from verification. 668.54(b) provides the list of exclusions. One of the exclusions pertains to applicants who are only eligible for unsubsidized aid. Per this regulation, verification would not be required for these applicants. However, ED has indicated that for applicants only eligible for unsubsidized aid who are selected for Verification Groups V4 or V5, the school should verify high school completion and identity/statement of educational purpose. You would not need to verify any of the other items included in verification for Group V5 for these applicants. Although verification is not required for these applicants, ED believes verification of these items will help ensure that only eligible students are receiving federal student aid. For information on this issue, please see the regulation cited above as well as the verification section of the Program Integrity Information Page Q&A on IFAP – VER-Q6/A6 and DOC-Q18/A18. The following is the direct link to the Q&A for verification:

https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html

To access the federal register and the DCL for 2020-2021 verification, please use the following links:

https://ifap.ed.gov/fregisters/FR052419.html
https://ifap.ed.gov/dpcletters/GEN1902.html