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

Award Year: 2024-25 KA-36871 Helpfulness Rating 225 page views

This guidance is specific to the 2024-25 award year and later. For 2023-24* award year guidance see AskRegs Q&A, What Documentation Is Required To Complete Verification When an Individual Files an Amended Tax Return?

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:

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?

AskRegs Q&As represent NASFAA's understanding of regulatory and compliance issues. They are FOR INTERNAL USE ONLY. While NASFAA believes AskRegs Q&As are accurate and factual, they have not been reviewed or approved by the U.S. Department of Education (ED). If you should need written confirmation of AskRegs information for audit or program review purposes, please contact your ED School Participation Division. NASFAA shall not be liable for technical or editorial errors or omissions contained herein; nor for incidental or consequential damages resulting from the furnishing, performance, or use of this material.