IRS Data Retrieval Tool

IRS Data Retrieval Tool
The IRS Data Retrieval Tool allows applicants who have already filed their federal income tax returns to prefill the answers to some questions on the Free Application for Federal Student Aid (FAFSA) by transferring data from their federal income tax returns. This can save the family some time in completing the FAFSA. It may also reduce the likelihood that your FAFSA will be selected for verification. The IRS Data Retrieval Tool has been available since the 2009-10 award year. Millions of students used the IRS Data Retrieval Tool last year.

When Can One Use the IRS Data Retrieval Tool?
The IRS Data Retrieval Tool can be used when filing the initial or renewal FAFSA. If an applicant files the FAFSA based on estimated income data (e.g., based on the last pay stub of the year and W-2 and 1099 statements), the applicant can use the IRS Data Retrieval Tool after filing his/her federal income tax returns to update the FAFSA form. Given that some states and colleges have very early deadlines, before most families would be able to file their federal income tax returns, it seems likely that the IRS Data Retrieval Tool will be used most often to update the FAFSA form after the family has filed their federal income tax returns.

Applicants must have filed their federal income tax returns before they can use the IRS Data Retrieval Tool. The IRS Data Retrieval Tool can be used 1-2 weeks after the federal income tax return is filed if the return is filed electronically and 6-8 weeks after filing a paper return. The Department of Education has an outline of the steps to transfer tax information here: Simple Steps to Transfer Tax Information Into Your FAFSA Form

How Does the IRS Data Retrieval Tool Work?
While completing an original online FAFSA or updating an existing FAFSA, eligible applicants will be provided with an opportunity to use the IRS Data Retrieval Tool. Applicants may be asked a few screening questions to determine their eligibility to use the tool.

Eligible applicants who choose to use the tool will be temporarily transferred to the IRS web site, where they will be asked a few questions to authenticate themselves (i.e., prove that they are who they say they are). After the applicant has authenticated himself or herself, the IRS web site will display the data to be transferred to the FAFSA. The applicant may then choose whether or not to transfer the data. If the applicant chooses to transfer the data, the applicant will have an opportunity to update the data, if necessary. (An applicant who transfers the data unmodified may reduce the likelihood that their FAFSA will be selected for verification.) The applicant will then be returned to the FAFSA web site where they will complete the rest of the FAFSA.

Who Can Use the IRS Data Retrieval Tool?
Applicants must have a valid Social Security Number and FSA ID to use the IRS Data Retrieval Tool. The applicant will need to authenticate himself or herself to the IRS in order to use the IRS Data Retrieval Tool. Students and parents must use the tool separately for their respective income tax returns.

Who Can’t Use the IRS Data Retrieval Tool?
If an independent applicant is married and files separate federal income tax returns or a dependent applicant’s parents are married and file separate federal income tax returns (e.g., married filing separately or head of household), the applicant will not be able to use the IRS Data Retrieval Tool. Also, if there has been a change in the marital status of the applicant or parent (if the applicant is a dependent student) after the end of the tax year, the applicant will not be able to use the IRS Data Retrieval Tool.

The IRS Data Retrieval Tool will transfer information only from an original income tax return and not an amended income tax return. Thus, if the applicant, spouse or parent, as applicable, has filed an amended income tax return, the applicant will not be able to use the IRS Data Retrieval Tool. Applicants who have filed a foreign income tax return instead of or in addition to a US income tax return will be unable to use the IRS Data Retrieval Tool. For example, taxpayers who file both a US income tax return and a Puerto Rican tax return will be unable to use the IRS Data Retrieval Tool. Also, the IRS Data Retrieval Tool is available only to taxpayers who have a valid Social Security number. Taxpayers who file income tax returns using a Tax ID Number (TIN) will not be able to use the tool. The home address listed on the FAFSA must match the home address listed on the federal income tax return.

Avoiding Verification
If the applicant allows the data to be transferred from the IRS Data Retrieval Tool to the FAFSA without modification, the transferred data will not be subject to verification. This will reduce the likelihood that the applicant’s FAFSA will be selected for verification, potentially saving the applicant time and hassle. (College and university financial aid administrators are strongly encouraging applicants to use the IRS Data Retrieval Tool as use of the tool will reduce their workload too.)If an applicant does not use the IRS Data Retrieval Tool and the applicant’s FAFSA is selected for verification, the applicant will be required to complete IRS Form 4506-T, Request for Transcript of Tax Return, during verification. (It’s usually quicker to request the tax transcript electronically or by calling 1-800-908-9946. It can take up to 30 days to process a paper copy of IRS Form 4506-T.) If the applicant, spouse or parent, as applicable, filed an amended income tax return, they will be required to request both a tax return transcript and tax account transcript. It is no longer sufficient to provide a photocopy of the federal income tax return. The US Department of Education is requiring applicants to provide a copy of their federal income tax returns directly from the IRS to prevent fraud. In the past, some applicants have supplied false copies of their federal income tax returns during verification.