Use the Data Retrieval Tool to Complete the FAFSA

Let the IRS Help You Complete Your Financial Aid Application

jodi-okun-irs-tool-fafsa

Good news - the IRS Data Retrieval Tool (DRT) is available as of February 7, 2016! If your response is “So what,” then you might not be the parent of a high school senior or college student. If you think that’s good to know, then you are probably familiar with the FAFSA (Free Application for Federal Student Aid). As the form colleges use to determine how much financial aid your student can receive, the FAFSA requires a good deal of information about the previous year’s income.

 

For many families, this is when the FAFSA becomes problematic. Because they think tax returns are difficult to complete, they automatically believe anything that has to do with income is also going to be difficult. So they labor through the FAFSA, manually going back and forth between their tax returns and the application, and often making some type of input error. The Data Retrieval Tool is designed to eliminate all that hassle and reduce any confusion. If you are eligible to use it, the DRT can be fast, easy and accurate. Here are a few things you need to know about using the DRT:

 

  • Who can use the DRT? Most parents and students can use the DRT to have the IRS instantly populate FAFSA fields with the appropriate information from their federal tax returns. There are a few exceptions where the tool is not available, such as households that file a foreign tax return, use a tax status of married filing separately, amend their tax returns, or who may be the victims of identity theft. If you cannot use the DRT, however, you can request an IRS transcript which you can use to submit to any colleges which might request verification of your information.
  • When can I use the DRT? Although the tool itself is available now, your ability to use it depends on when and how you file your federal income tax return. If you file your tax returns electronically, it usually takes about two weeks for that information to be available. Those households which file a paper return might experience a delay of as long as eight weeks. You should still file your FAFSA, though, using estimated information and then go back and update it once the DRT is available to you.
  • How do I use the DRT? Start or log into your FAFSA account at www.fafsa.gov using your FSA ID. In the financial information section you will be asked if you have already completed a federal tax return. If you respond “yes,” you will be given the option to use the DRT. You do not have to use this if you don’t want to, and can proceed to complete your FAFSA manually. If you want to proceed, you will automatically be taken to the IRS website. Complete the online form with the same information that you used when filing your tax return, and click on the box that says “Transfer my tax information into the FAFSA.” You will be able to preview and approve the information before it is transferred.
  • What if I already filed the FAFSA using income estimates? Log in to make corrections to your FAFSA. In the finances section switch your tax status from “will file” to “already completed.” You will then be given the same prompts to use the DRT. Make sure both students and parents update their tax information, and that you update the school codes if you apply to more than ten colleges.