NASFAA AskRegs: What Is Federal Tax Information (FTI)?

Starting with the 2024-25 award year, FAFSA contributors (student and spouse or parent/stepparent, as applicable) must give the U.S. Department of Education (ED) consent to retrieve federal tax information (FTI) from the Internal Revenue Service (IRS) for purposes of determining a student's eligibility for Title IV federal student aid. If the student, spouse, or parent fails to provide consent, the student is not eligible for Title IV aid--no exceptions. The retrieval of FTI replaces the IRS Data Retrieval Tool (IRS DRT), and FTI will be stored separately in the Federal Tax Information Module (FTIM).

FTI for each tax filer includes the following:

Tax year (e.g., 2022 tax year information for the 2024-25 FAFSA);
Tax filing status;
Adjust Gross Income (AGI);
Number of dependents;
Income earned from work;
Taxes paid;
Educational tax credits;
Untaxed individual retirement arrangement/account (IRA) distributions;
IRA deductions and payments;
Untaxed pension amounts
Tax-exempt interest;
Schedule C net profit/loss;
Indicators for Schedules A, B, D, E, F, and H; and
IRS response code.

The IRS response code will indicate the status of the tax filer/FTI with the IRS, to include one of the following:

Tax filer and FTI provided to FTIM;
Not found at the IRS;
Found and a nonfiler; or
Found but IRS not able to provide information.

Per ED in its February 28, 2024 EDExpress: Your Solution for Accessing FTI webinar, FTI also includes the existence or nonexistence of FTI.

See the May 12, 2023 Electronic Announcement (GENERAL-23-34), which provides additional information, including this"

"FTI can only be stored/held in the FTI Module (FTIM), which is a new Federal Student Aid (FSA) system designed to ensure compliance with IRS Publication 1075 requirements as well as the broader security of the data received. The Department’s FAFSA processing system (FPS), which will replace the central processing system (CPS), will send information to FTIM to calculate the student aid index (SAI) using both FTI and FPS data provided by the contributors on the FAFSA. In no circumstances will FPS receive FTI from FTIM; it will only receive the SAI and intermediate values. With the approval and consent of the applicant and, if applicable, parent(s) or spouse of the applicant, FTI will be available to institutions, state higher education agencies, and designated scholarship organizations, via the Institutional Student Information Record (ISIR). FTI will not be available in FAA Access, nor will FTI corrections be permitted through the system. While modifications to FTI are not permissible, FAFSA applicants may work with their postsecondary institution to request a professional judgment. Similar to the existing FAFSA process, FTI will not be made available to the applicant and other contributors on the online FAFSA or the applicant's Student Aid Report (SAR)."

For more information on system processing of FTI, please see the December 28, 2022, Electronic Announcement (APP-22-26), Publication of the 2024-25 Draft FAFSA Specifications Guide.

What Is Federal Tax Information (FTI)?

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