The Best Way to Update Income Information on Your FAFSA
All students are required to update estimated income and tax information on the FAFSA. This ensures that financial aid awards are based on accurate information. Students who are selected for verification must have income and tax information verified directly by the IRS. There are two ways to update and verify information:
- Use the IRS Data Retrieval Tool. This tool allows most FAFSA applicants and parents to retrieve tax data directly from the IRS and transfer the data back to the FAFSA; income and tax information are both updated and verified through this one step.
- Manually update FAFSA information and provide a tax transcript. If income and tax information are manually updated on the FAFSA, information will still need to be verified by obtaining a tax transcript from the IRS and submitting it to the financial aid office.
Using the IRS Data Retrieval Tool is best as it updates and verifies information in one step. The IRS Data Retrieval Tool is available 2-3 weeks after filing electronically or 8-11 weeks after filing by mail (the timeframe is longer for those who owe a payment to the IRS – See Chart of Time Frames). Here’s how to use the IRS Data Retrieval Tool: Go to your FAFSA at fafsa.gov:
- Log in under “Returning User” using your FSA ID username and password (if you do not have one, get one at FSAID.ed.gov).
- Click on “Make FAFSA Corrections,” and create a Save Key.
- Go to the “Financial Information” section.
- Locate the “Have you completed your IRS income tax return?” question and change the response from “Will file” to “Already completed.” Filter questions will appear that will determine whether the IRS DRT can be used.
- If all filter questions can be answered “no,” click on “Link to the IRS” (a parent will have to provide his or her FSA ID to retrieve parent tax information).
- Once in the IRS site, provide the required information and click “Submit.” In order for retrieval to work, the address entered must match the address on file with the IRS exactly (Click here to view video: IRS Data Retrieval – What Went Wrong?). Once the retrieved information is displayed, click on the box to enable the “Transfer Now” button.
- Click on the “Transfer Now” button and the information will transfer back to the FAFSA. DO NOT change any of the information that was transferred from the IRS.
- Repeat this process for the parent(s) and student if both parties provided financial information on the FAFSA and filed a tax return. If one party was not required to file a tax return, be sure that is indicated on the FAFSA.
- Once all updates and transfer are complete, review your FAFSA summary and submit the FAFSA. The information will be processed by the federal processing center and sent to all schools listed on the FAFSA.
If IRS data retrieval is not working, see if any of the below information is helpful to you.
Want more information on the IRS Data Retrieval Tool or obtaining tax transcripts?
What Went Wrong? This video provides troubleshooting information for when IRS data retrieval doesn’t work. Click here to view: IRS Data Retrieval – What Went Wrong? Download pdf of presentation.