Verification in 2024-2025

By Rick Cox

The Department of Education has posted the federal register and accompanying Dear Colleague Letter for verification for the 2024-2025 award year. You can access these postings here and here.

As a reminder, colleges must report the results of verification of identity. Currently this is being done through FAA Access to CPS Online. However, this area will be moved to the FAFSA Partner Portal in the near future. Details about this change should be forthcoming from the department. The results must be reported within 60 days after 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.

The following outlines the items to be verified for the 2024-2025 award year for each verification group:

V1: Family Size
Tax Filers

• Adjusted Gross Income
• Income Earned from Work
• U.S. Income Tax Paid
• Untaxed Portions of IRA Distributions
• Untaxed Portions of Pensions
• IRA Deductions and Payments
• Tax Exempt Interest Income
• Education Tax Credits
• Foreign Income Exempt from Federal Taxation

Non-Tax Filers

• Income Earned From Work

V4: Identity/Statement of Educational Purpose

V5: Family Size – Identity/Statement of Educational Purpose

Tax Filers

• Adjusted Gross Income
• Income Earned from Work
• U.S. Income Tax Paid
• Untaxed Portions of IRA Distributions
• Untaxed Portions of Pensions
• IRA Deductions and Payments
• Tax Exempt Interest Income
• Education Tax Credits
• Foreign Income Exempt from Federal Taxation

Non-Tax Filers

• Income Earned from Work

For tax filers, all items (except Foreign Income Exempt from Federal Taxation) will not need to be verified if the tax data is transferred directly from the IRS (FADDX) and not changed. For tax filers whose information was not transferred directly from the IRS and for Foreign Income Exempt from Federal Taxation, the filer must provide one of the following:

• A transcript obtained at no cost from the IRS or other relevant tax authority or a U.S. territory or commonwealth or foreign government; or
• A copy of the income tax return and the applicable schedules filed with the IRS or other relevant tax authority.

Rollovers
If the Untaxed Portions of IRA Distributions or Untaxed Portions of Pensions contain a rollover, you must collect a statement confirming the amount of the rollover. This is required whether or not tax information is transferred directly from the IRS.

For non-filers, you must collect

• A signed and dated statement certifying:
  – That the individual is not required to file a 2022 income tax return; and
  – Sources and amounts of earnings, other income and resources that supported that individual for the 2022 tax year.
• For individuals without an SSN, ITIN or EIN, the statement must indicate they do not have an SSN, ITIN or EIN.
• A copy of the IRS Form W-2 for each source of 2022 employment income received or an equivalent document; and
• Except for dependent students, verification of non-filing for individuals who would file a return with a relevant tax authority other than the IRS dated on or after October 1, 2023.

If a non-filer is unable to obtain the required verification of non-filing status from the relevant tax authority and the college has no reason to question the student’s or family’s good-faith effort to obtain the required documentation, the school may accept a signed statement certifying that the individual attempted to obtain the verification of non-filing from the relevant tax authority and was unable to obtain the required documentation.

Family Size
If family size is transferred directly from the IRS and is not changed, it will not need to be verified. If it is not transferred directly from the IRS or is updated on the FAFSA, you must collect a signed statement that lists the name and age of each family member for the 2024-2025 award year and the relationship of that family member to the applicant.

Statement of Educational Purpose
As a reminder, you must use the exact language provided by the Department of Education in the federal register on the Statement of Educational Purpose. Additionally, the applicant must present an unexpired valid government issued photo ID.

Special Circumstances

Joint Returns:
For tax filers who filed a 2022 joint income tax return and at the time of the FAFSA are now separated, divorced, widowed or married to someone other than the spouse included on the 2022 joint income tax return, you must collect:

• A transcript obtained from the IRS or other relevant tax authority that lists 2022 tax account information; or
• A copy of the income tax return and applicable schedules that were filed with the IRS or other relevant tax authority; and
• A copy of the W-2 for each source of 2022 employment income received or an equivalent document.

Filing Extensions:
For an individual who is required to file a 2022 IRS income tax return and has been granted a filing extension by the IRS beyond the automatic six-month extension, you must collect:

• A signed statement listing the sources of any 2022 income and the amount of income from each source;
• A copy of the IRS’s approval of an extension beyond the automatic six-month extension;
• A copy of IRS Form W-2 for each source of 2022 employment income received or an equivalent document; and
• If self-employed, the signed statement must indicate the amount of estimated AGI and U.S. income tax paid for the tax year 2022.

Please note – 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 is permitted to submit a statement certifying that he or she has not filed an income tax return or a request for a filing extension because of that service.

Tax-Related Identity Theft:
For an individual who was the victim of IRS tax-related identity theft, you must collect:

• 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 the victim of IRS tax-related identity theft and that the IRS has been made aware of the tax-related identity theft.

If an individual is unable to obtain the TRDBV from the IRS, the college may accept an equivalent document provided by the IRS or a copy of the signed 2022 income tax return the individual filed with the IRS.

Amended Returns:
For an individual who filed an amended return with the IRS, you must collect a signed copy of the 1040X that was filed with the IRS that includes the changes made to the tax filer’s 2022 tax information as well as one of the following:

• Updated income and tax information from the IRS on an IRIS record with all tax information from the original return
• A transcript obtained from the IRS that lists 2022 tax account information of the tax filer(s), or
• A signed copy of the 2022 IRS Form 1040 and the applicable schedules that were filed with the IRS.

In some cases, the IRS may have made changes to amend the tax return information. For these cases, a 1040X will not exist. Instead, the filer should provide a copy of the IRS letter outlining the changes that were made. They must still provide one of the items listed in the three bullets above.

Incarcerated/Confined Students:
For students who are confined or incarcerated, verification of identity and the statement of educational purpose are all that is needed. This will only apply to those selected for verification groups V4 and V5.

These applicants will not need to verify any other items. Nothing will be required for applicants selected for verification group V1.

If the confined/incarcerated individual is unable to submit a signed and notarized statement of educational purpose, the college may accept a signed statement from an authorized official that works for the correctional facility, or authorized official that works for the oversight entity, confirming to the college that the individual who completed the FAFSA is the person signing the statement of educational purpose.

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 exclusion pertains to applicants who are only eligible for unsubsidized aid. Per this regulation, verification would not be required for these applicants. However, the Department of Education has indicated that for applicants only eligible for unsubsidized aid who are selected for verification groups V4 or V5, the college should verify 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, the department believes verification of identity 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. This is the direct link to the Q&A for verification:

Although not required from a regulatory standpoint, Global believes verifying this item for these students is a good practice.

Rick Cox is Global’s Executive Director of Regulatory Affairs and Compliance