FAFSA/IRS Data Retrieval Tool – What It Is and How It Works

Editor's Note:  If you're looking for information about how to use the IRS Data Retrieval tool to enter income information into your 2014-15 FAFSA, please read Sue Allmon's latest blog post on this important subject.

This is the second post in a three-part series on the FAFSA's income reporting options.

The IRS Data Retrieval Tool helps students and families by simplifying the FAFSA filing process. The DRT is the result of a partnership between the U.S. Department of Education and the Internal Revenue Service. It was created to give families who are filing the Free Application for Federal Student Aid direct, online access to their federal tax return information. 

If you have already filed your federal tax return with the IRS, the DRT will allow you to pre-fill income questions on your FAFSA. This tool will save you the time and hassle of finding and translating those income numbers from your tax return to the FAFSA and ensure that the numbers go into the right spots.

But just when you can use the DRT depends on how and when you file your federal tax return.

  • If you filed your federal tax return electronically, the DRT can be used 1-2 weeks after your filing date.
  • If you filed a paper tax return, you will be able to access the DRT in 6-8 weeks.  

So just how do you use the DRT when you file your FAFSA?

The online FAFSA will give you the opportunity to use the Data Retrieval Tool to fill in your income information  in Section Two if you're the student or Section Four if you're the parent.  You will be asked a series of questions to determine if you are eligible to use the DRT. For example: Did you file an amended tax return? Or: Are you married but filing separately? The screenshot below shows the DRT option presented to a dependent student.

If you are the student and answer "No" to the three eligibility questions that appear on this screen, then you can use the DRT to access the IRS database. Please note that both you and your parent will need to have a valid Social Security Number and FAFSA PIN to be able to use the DRT.  That shouldn’t be an issue since you need an SSN to file a FAFSA and a FAFSA PIN to submit your financial aid application online.

The next screenshot shows the DRT option for the parent who is helping to complete a child's FAFSA. Again, the parent must be able to select the "No" answer to each question in order to take advantage of the Data Retrieval Tool.

 

For security purposes, once you are transferred to the IRS website, you will be asked a series of verification questions.

Important Tip: The home address listed on the FAFSA must match the home address listed on the federal tax return.

Once the IRS confirms that you are you, your income data will be displayed and available to be transferred to the FAFSA. At this point, you can decide whether to finish the transfer of data to your FAFSA or not. Once you make that decision, the system will return you to the online FAFSA website to complete your application. Even though your IRS data have been transferred, you still have the ability to update any of your income data when you return to the FAFSA.

Why use the DRT?

One reason – and it’s a big one – is that you lessen the odds that your FAFSA will be selected for verification. This is the process the government uses to make sure that aid eligibility decisions are based on accurate information. The verification process requires you to submit documentation to the school’s financial aid office. The verification process is straightforward, but it could delay the school’s ability to determine whether a student is eligible for a federal or state grant, an institutional merit scholarship, a subsidized federal loan, or other aid programs.

Another reason to use the DRT: If you took advantage of the “will file” option to submit your FAFSA to meet an early “priority” deadline set by your state’s grant program or your intended school, you’ll need to update your FAFSA after you’ve actually submitted your tax return. You can use the Data Retrieval Tool to make sure you quickly and easily update your FAFSA with complete and accurate information. For tips on how to use the “will file” option, see my first post in our “Your FAFSA and Your Taxes” series – “Filing Your FAFSA Before You File Your Tax Return". 

In the next CollegeUp.org blog post in this series, I’ll explain why some students and parents cannot use the Data Retrieval Tool and provide tips on how to file your FAFSA when you can't use the DRT.

Sue Allmon is a financial aid administrator with more than 25 years of experience in helping students find money needed to pay for college.

Updated February 4, 2014.

Related posts:

Why, When and How to Use IRS Data Retrieval Tool to Report Income on Your FAFSA

Filing Your FAFSA Before Filing Your Tax Return – Can It Be Done?

When IRS Data Retrieval Tool Isn't an Option for Completing the FAFSA

The FAFSA Clock Is Ticking – It’s Never Too Early to File Your FAFSA to Apply for Financial Aid

 

Comments for FAFSA/IRS Data Retrieval Tool – What It Is and How It Works


Name: Wanda Parker
Time: Monday, July 28, 2014

Can't get info to go through to get my transcripts?

Name: Patricia Scherschel, CollegeUp Blog Administrator
Time: Tuesday, July 29, 2014

Wanda Parker:

In response to the comment/query you posted on July 28, 2014:

According to CollegeUp.org blogger and financial aid expert Sue Allmon, if you are unable to request your tax transcript to be delivered as a PDF to your email address, you can complete the form online to request that a paper copy be mailed to you. If you are unable to complete that process, you will need to call the IRS at 1-800-908-9946 and request your copy. Please be advised, if you call, you will NOT speak to a person, but will be taken through the process via an automated voice response system.

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