Is a Verification Of Nonfiling Required To Complete Verification?

Starting with the 2024-25 award year, a verification of nonfiling is only required when verifying income earned from work for a nontax filer who would file a tax return with a tax authority other than the Internal Revenue Service (IRS). The September 19, 2023 Federal Register spells out the documents required for a nontax filer. A verification of nonfiling from the IRS is no longer listed for someone who would have filed taxes with the IRS. If it is no longer listed, it is no longer required.

Anytime a student is selected for verification of income earned from work in verification tracking group V1 or V5, the following individuals who are nontax filers must submit a verification of nonfiling status from a relevant tax authority other than the IRS, dated on or after October 1, 2023 for 2024-25 verification:

• For a dependent student, each parent who would have but did not file a tax return with a relevant tax authority other than the IRS; and
• For an independent student, the student and/or spouse who would have but did not file a tax return with a relevant tax authority other than the IRS.

The dependent student who is a nontax filer is not required to provide an IRS Verification of Nonfiling Letter or other confirmation of nonfiling status. All nontax filers, including dependent students, who are selected for verification of income earned from work also must provide:

(1) A signed and dated statement certifying—

(a) That the individual is not required to file a 2022 income tax return; and
(b) The sources and amounts of earnings, other income, and resources that supported the individual(s) for the tax year being verified;

(2) For individuals without a Social Security number (SSN), Individual Taxpayer Identification Number (ITIN), or Employer Identification Number (EIN), that they do not have an SSN, ITIN, or EIN; and

(3) A copy of IRS Form W–2 or equivalent document for each source of employment income received for the tax year being verified.

Unless there is conflicting information, an IRS Verification of Nonfiling Letter is no longer required for someone who would have filed a U.S. tax return.

The verification of nonfiling from a relevant taxing authority other than the IRS is required anytime a parent of a dependent student, an independent student, or a spouse nontax filer has not filed and was not required to file a tax return. This includes any of these individuals who are subject to verification and who did not file taxes, regardless of the amount of income (even zero). For example, if a dependent student is selected for verification, and the student and both parents on the FAFSA would have but did not file taxes with a tax authority other than the IRS, then both parents (but not the student) will each need to provide a verification of nonfiling—in other words, two nonfiling letters would be required to complete verification.

Individuals Who Attempt but Fail to Obtain a Verification of Nonfiling from a Relevant Tax Authority Other Than the IRS:

If the parent, independent student, or spouse attempts is unable to obtain a verification of nonfiling from the relevant tax authority, and the school has no reason to question the student’s or family’s good-faith effort to obtain one, the school may accept as a replacement for the verification of nonfiling a signed statement or worksheet certifying that the individual attempted to obtain the verification of nonfiling from the relevant tax authority and was unable to obtain it. Whether or not the individual made a good-faith effort to obtain the verification of nonfiling is a determination that is made by the school. Since this is a flexibility that is specifically left to the school, neither ED nor NASFAA will define this for the school.

All of the other documents listed above still must be collected; however, the signed statements can be combined into a single document, such as a verification worksheet or other form.

Would File a Tax Return With a Non-IRS Tax Authority: See AskRegs Q&A, How Do We Know an Individual Would File a Tax Return With a Tax Authority Other Than the IRS?

Additional Documentation Requirements: In addition to the verification of nonfiling, additional documentation may be required to complete verification. Refer to the Federal Register and Dear Colleague Letter containing the verification requirements for the applicable award year.