IRS Direct Data Exchange
The Department of Education and the Internal Revenue Service have worked together to develop a process, known as the FUTURE Act Data Direct Exchange (FA-DDX). This process was formerly known as the IRS-DRT (Data Retrieval Tool). FA-DDX simplifies the steps to complete the Free Application for Federal Student Aid (FAFSA).
The process enables FAFSA to retrieve the income and tax data from the IRS. When filling out FAFSA, applicants are required to approve the use of FA-DDX to be considered eligible for federal aid. Parents, students (and spouses) must provide this consent even if they did not file a federal tax return. In some cases, data will not be transferred via FA-DDX and you applicants will need to enter income and tax data manually to submit FAFSA.
Applicants are unable to utilize the IRS Data if:
- If the parents of a dependent student file separate tax returns.
- If the applicant or applicant’s parent had a change in marital status after the end of the tax year on December 31st.
- If anyone has filed an amended tax return
- If the applicant or parent filed a foreign tax return or Puerto Rican tax returns.
- IRS Transcripts
If an undergraduate applicant’s file is selected for verification, the applicant, parent, or spouse will need to request an IRS Tax Return Transcript from the Internal Revenue Service. Graduate applicants do not need to request their IRS Tax Return Transcript from the Internal Revenue Service unless expressly asked. The IRS Tax Return Transcript is different than the Tax Account Transcript.
- Ordering Transcripts From The IRS
Applicants can request a copy of an IRS Transcript from the IRS online, by mail or by telephone. For detailed instructions visit the IRS website.
Quick Facts About the IRS Tax Return Transcript
- There is no charge for the IRS Tax Return Transcript.
- Applicants can request their tax transcript as soon as the IRS processes their return. The IRS generally processes online returns within three weeks and those filed by paper within six to eight weeks.
- Applicants should receive the transcript within 5 to 10 calendar days after a request is made. This does not change based upon "peak" times for the IRS because the system is automated.
- Tax Filers With Special Circumstances
Amended Returns
If an individual filed an amended IRS income tax return, provide both of the following:
- A signed copy of the original IRS income tax return that was filed with the IRS or an IRS Tax Return Transcript (signature not required) for the applicable tax year; and
- A signed copy of the IRS Form 1040X, "Amended U.S. Individual Income Tax Return," that was filed with the IRS
Foreign Tax Returns
Applicants who filed foreign returns must submit a signed copy of the foreign returns the Foreign Income Verification Form. Applicants not required to file taxes under the nation's process should submit a signed statement from the employer(s) on company letterhead certifying income and taxes paid, if any, for an applicable calendar year.
US Territory or Commonwealth Tax Returns
Applicants who filed or will file an income tax return with Puerto Rico, another U.S. territory (e.g., Guam, American Samoa, the U.S. Virgin Islands, the Northern Marianas Islands), or with a foreign country, must provide a signed copy of that income tax return(s).
Identify Theft
A victim of IRS identity theft, who has been unable to obtain an IRS Tax Return Transcript or use the IRS DDX, must provide a signed copy of the applicable paper IRS income tax return that was filed with the IRS and a signed copy of IRS 4674C letter (a letter from the IRS acknowledging the identity theft) or a statement signed and dated by the tax filer indicating that he or she was a victim of IRS tax related identity theft and the IRS is aware of it.