What Documentation Is Required To Complete Verification When an Individual Files an Amended Tax Return?

This AskRegs Knowledgebase Q&A is based on guidance prior to the U.S. Department of Education's (ED's) April 1, 2024 Electronic Announcement (GENERAL-24-29). We will update this Q&A when ED provides additional guidance. 

Starting with the 2024-25 award year, amended tax data will be transferred into the FAFSA using the FUTURE Act Direct Data Exchange (FA-DDX) only if a 1040-X amended tax return was filed and processed by the IRS before the FAFSA was filed. If the FA-DDX cannot be used and the tax data are manually entered on the FAFSA, then presumably the contributor reports their amended information at the time the FAFSA was filed. There will be no IRS Request Flag or any other amended tax return indicator on the FAFSA, in the FA-DDX, or on the Institutional Student Information Record (ISIR). There will also not be any postscreening to pick up amended tax data processed after the FA-DDX was used or the data were manually reported. Therefore, the school will only need to follow up and verify the amended tax information when they find out on an ad hoc basis that an amended tax return was filed after the FAFSA was filed. This would still be conflicting information that needs to be resolved. Otherwise, you follow the verification requirements for regular, non-amended tax filers. See AskRegs Knowledgebase Q&A, Does the FA-DDX Include Amended Tax Return Data?

That having been said, when you are verifying amended tax return filers, you should obtain a signed copy of the 1040-X that was filed for the applicable tax year or documentation from the IRS that includes changes made to the tax filer's information for the applicable tax year. You must also obtain one of the following:

• Updated income and tax information from the Internal Revenue Service (IRS) on an ISIR record with all tax information from the original tax return;
• A signed or unsigned IRS Tax Return Transcript containing information from the original tax return filed with the IRS or any other IRS tax transcript containing all income and tax information from the original tax return that is subject to verification; or
• A signed copy of the IRS Form 1040 for the applicable tax year and the applicable schedules that were filed with the IRS.

For more on tax return signature requirements, see AskRegs Q&A, Whose Signature Is Required On a Copy of the Tax Return That Is Accepted In Place Of a Tax Transcript?

Federal verification must be completed according to the documentation requirements outlined in 668.57(b) and (c) of the regulations and the Federal Register containing the verification documentation requirements for the applicable award year.

Alternatives In Any Case: As an alternative, the Tax Account Transcript can be used in conjunction with a Tax Return Transcript or tax return copy to complete verification without a copy of the 1040-X. Also, an IRS Record of Account Transcript can be used by itself (without a 1040-X, Tax Return Transcript, or tax return) to complete verification of the income data; however, the IRS Record of Account Transcript may be more difficult to interpret and may require the assistance of the IRS or a tax expert.

Corrections Were Made By the IRS But No 1040-X Was Filed or Required: See AskRegs Q&A, How Do We Complete Verification When No 1040-X Was Filed But the IRS Corrected the Tax Return?