2014-2015 VERIFICATION UPDATES

2013 DE-DC-MD FALL CONFERENCE

Vicki A. Smith, Director Student Financial Aid Programs

Allegany College of Maryland

November 12, 2013

Topics:

1. Formula Changes

2. FAFSA Changes

3. Verification Changes

4. ISIR Processing Changes

FORMULA CHANGES – NONE!

Reminder: Auto 0 EFC is $24,000 or less and family must be eligible for the SIMPLIFIED Formula

Independents without dependents other than a spouse do not qualify for Auto 0 EFC

The ISIR shows students who are eligible - “Auto Zero EFC Indicator”

Simplified Formula: assets are not included in the calculation of the EFC

Remember there are 6 EFC Formulas….

Formulas:

Dependent Simplified Regular

Independent With Dependents Other than a Spouse

Simplified Regular

Independent Without Dependents Other than a Spouse

Simplified Regular

What Does SIMPLIFIED Mean?

For the Dependent Student:

Someone counted in the dependent student’s HH size received one of the means tested benefits (SSI; SNAP; Free/Reduced Lunch; TANF, or WIC) OR

Parents filed or were eligible to file 1040A or EZ or were not required to file OR

One of the parents is a dislocated worker

 AND 

Parents income is $49,999 or less (AGI or total of all W-2 forms)

For the Independent Student: Anyone counted in the student’s

HH size received one of the means tested benefits (SSI; SNAP; Free/Reduced Lunch; TANF, or WIC) OR

Student and Spouse (if applicable) filed or were eligible to file 1040A or EZ or were not required to file OR

The student is a dislocated worker

AND

  The student’s and spouse’s

income is $49,999 or less (AGI or total of all W-2 forms)

FAFSA CHANGES

There are several – some more challenging than others

Information based on DRAFT FAFSA DATED 10.24.13 (attached).

FAFSA CHANGES

Q8 – Q is the same, but changed directions for SSN’s starting with 666:

Notes for question 8 (page 3)

Enter your Social Security Number (SSN). If you are a resident of the Freely Associated States (i.e., the Republic of Palau, the Republic of the Marshall Islands, or the Federated States of Micronesia) and were issued an identification number beginning with “666” when submitting a FAFSA previously, enter that number here. If you are a first-time applicant from the Freely Associated States, enter “666” in the first three boxes of the SSN field and leave the remaining six positions blank and we will create an identification number to be used for federal student aid purposes.

FAFSA CHANGES

Q16 – Q is the same, but added to the explanation:

Notes for questions 16 and 17 (page 3)

Report your marital status as of the date you sign your FAFSA. If your marital status changes after you sign your FAFSA, check with the financial aid office at the college. Consistent with the Supreme Court decision on the Defense of Marriage Act (DOMA), same-sex couples must report their marital status as married if they were legally married in a state or other jurisdiction (foreign country) that permits same-sex marriage.

FAFSA CHANGES

Q34 – New Question this year for the student:

34. For 2013, what is or will be your tax filing status according to your tax return?

Single . . . . . . . . . . . . . . . . . . . . .. .1

Head of household. . . . . . . . . . . . . .4

Married—filed joint return . . . . . . . . 2

Married—filed separate return. . . . . .3

Qualifying widow(er). . . . . . . . . . . . 5

Don’t know. . . . . . . . . . . . . . . . . . .6

FAFSA CHANGES

Q. 45a. – added language to exclude Code DD on W-2 Form. This is listed on most W-2 forms and is the amount the employer pays for the employee health benefits. (Also under parent section.)

Q. 45i. – added language to include “untaxed portions of health savings accounts from IRS Form 1040 – Line 25.” (Also under parent section.)

Q. 45j – added language to include money provided by the other parent of a dependent student if the parents do not live together and the other parent is providing financial support to the student and that support is not part of a legal child support agreement. (GEN 13-12) Also, added language about 529 Plans:

“Money received, or paid on your behalf, also includes distributions to you (the student beneficiary) from a 529 plan that is owned by someone other than you or your parents (such as your grandparents, aunts, and uncles). You must include these distribution amounts in question 45j.”

FAFSA CHANGES

Dependency Question Changes: New Language Added:

Q. 51 - Do you now have or will you have children who will receive more than half of their support from you between July 1, 2014 and June 30, 2015?

Q. 56 - At any time on or after July 1, 2013, did your high school or school district homeless liaison determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless? See Notes page 9.

Q. 57 - At any time on or after July 1, 2013, did the director of an emergency shelter or transitional housing program funded by the U.S. Department of Housing and Urban Development determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless? See Notes page 9.

FAFSA CHANGES

Parent Instructions: New Language added in instructions and on Q59:

Step Four (Parent):

Answer all the questions in Step Four even if you do not live with your legal parents (your biological and/or adoptive parents). Grandparents, foster parents, legal guardians, aunts and uncles are not considered parents on this form unless they have legally adopted you. If your legal parents are married to each other or are not married to each other and live together, answer the questions about both of them. If your parent was never married or is remarried, divorced, separated or widowed, see Notes page 9 for additional instructions.

FAFSA CHANGES

Along with these instructions comes a new option for Parents’ Marital Status:

Unmarried and both parents living together.. . . . . . . .

Cannot use IRS Data Retrieval Process

Parents identified as PARENT 1 and PARENT 2 (not Father and Mother)

FAFSA CHANGES

What Does This Mean:

FAFSA will now require information on LEGAL Parents who LIVE TOGETHER regardless of MARITAL STATUS OR GENDER.

LEGAL: defined as BIOLOGICAL or ADOPTIVE Parents.

Key Points: LEGAL PARENTS AND LIVE TOGETHER

FAFSA CHANGES

FAFSA Updated Language - Notes on Who is Considered a Parent for Step 4:

If your parent was never married or is widowed and does not live with your other legal parent, answer the questions about that parent.

If your legal parents (biological and/or adoptive) are not married to each other and live together, select “Unmarried and both parents living together” and provide information about both of them regardless of their gender. Do not include any person who is not married to your parent and who is not a legal or biological parent. Contact 1-800-4-FED-AID for assistance in completing questions 80-94.

If your parents are married, select “Married or remarried.” Consistent with the Supreme Court decision on the Defense of Marriage Act (DOMA), same-sex couples must report their marital status as married if they were legally married in a state or other jurisdiction (foreign country) that permits same-sex marriage. If your legal parents are divorced but living together, select “Unmarried and both parents living together.”

If your parents are divorced or separated, answer the questions about the parent you lived with more during the past 12 months. (If you did not live with one parent more than the other, give answers about the parent who provided more financial support during the past 12 months or during the most recent year that you actually received support from a parent.) If this parent is remarried as of today, answer the questions about that parent and your stepparent.

If your widowed parent is remarried as of today, answer the questions about that parent and your stepparent.

FAFSA CHANGES – GEN 13-12:

FAFSA CHANGES

FAFSA Guidance on this Issue: (I have not seen any FOTW information on this yet.)

If your answer to question 59 was “Unmarried and both parents living together,” contact 1-800-4-FED-AID for assistance with answering questions 80-94.

We will need to give guidance to students/parents on how to respond to the tax filing status question; how to calculate AGI and taxes paid, untaxed income, and how to count household size.

VERIFICATION CHANGES

Customized Verification started 2012-2013 - HH size; number in college; SNAP benefits; child support paid; for tax filers: AGI, taxes paid, education credits, untaxed income items (untaxed IRA, untaxed pension, IRA deductions, tax exempt interest); for non-tax filers: income earned from work

Expanded in 2013-2014 – 5 Tracking Groups; Tracking Group number shows on the ISIR.

2014-2015 - Continuing with the Tracking Groups

VERIFICATION CHANGES V2 – is being eliminated. SNAP will still be collected in V1, V4, and V6 if

benefits are reported.

Adding a new group – V6 - “Household Resources Verification Group” - Used to verify other untaxed income reported on the FAFSA Q 45 and Q 94.

For students in this category: if it appears that the untaxed income and other income (from AGI or Income Earned from Work) do not appear to provide sufficient financial support, ED is requiring us to follow up with the applicant and spouse/parent to explain how the family was financially supported during 2013. (GEN 13-16)

ED has said it is okay to include on our review income from the following sources: welfare, untaxed SS, and SSI.

Acceptable documentation for Group V6 – copies of Form W-2 for 2013 and signed statements listing the SOURCE of the untaxed income and the AMOUNT of the income from each source for 2013.

VERIFICATION CHANGES

NEW GUIDANCE: Non-Tax Filers

Persons stating they are not required to file a federal return: if the school questions this claim, the school must require the applicant to submit a “Verification of Nonfiling” from the IRS for 2013. Use IRS Form 4506-T and check Box 7. (Form Attached.)

Please note the IRS will not be responding to these requests until after JUNE 15, 2014.

VERIFICATION CHANGES

Required reporting by schools on FAA ACCESS the results of verification for Verification Groups 4 and 5.

 

There will be a drop down menu with options and we must select one. (See Options Later Slides.)

“The school is not exempt from reporting a code for students who never enroll in the school.”

Report option opens in January with only manual entry for each student; later in April there will be a group reporting option, where we can upload multiple students in a file.

VERIFICATION CHANGES

FAAs will be able to enter SSNs/Name ID/Verification Results from a dropdown menu on the page.

Click “ADD SSNs” and enter additional ones.

VERIFICATION CHANGES

Dropdown options on FAA ACCESS will be:

Verification completed in person, no issues found

Verification completely remotely, no issues found

Verification attempted, issues found with identity

Verification attempted, issues found with HS Completion

No response from applicant or unable to locate

Later in 2014, there will be an option to load many students at one time using a flat file report.

VERIFICATION CHANGES Paper Tax Returns: Can be accepted to complete verification only in very

limited cases: Persons filing an amended tax return

Victims of IRS identity theft

Filed non-IRS income tax return

 

Documentation Update: Child Support Paid - can now also accept records of electronic payments made.

 

Reminder: the following information is considered verified if the applicant/parent used the IRS Data Retrieval process and the information is unchanged: 

AGI

U.S. taxes paid

Untaxed portions of IRA distributions

Untaxed portions of pensions

IRA deductions and payments

Tax exempt interest income

Education credits

VERIFICATION CHANGES

:AN IRS Tax Return Transcript is still required in certain situations – this is unchanged from 2013-14

VERIFICATION CHANGES

IRS Tax Return Continued…..

ISIR PROCESSING CHANGES

ISIR will now include the DRT Reason Flag.

Will be one for the student and one for the parent, if applicable.

Flag is designed to show us if the student and parent were presented with the IRS Data Retrieval Tool, and if not, the reason why it was not displayed.

ISIR PROCESSING CHANGES

A Student skipped the income and asset questions – IRS DRT was not displayed

B IRS DRT was displayed to student C Tax return status not equal to “Already completed” – IRS DRT was

not displayed D Marital status date greater than or equal to January 2014 – IRS DRT

was not displayed E First three digits of SSN are 666 – IRS DRT was not displayed

H Student amended his/her tax return – IRS DRT was not displayed

J Student filed a Puerto Rican or Foreign tax return – IRS DRT was not displayed

K Student is married and tax return filing status is Married Filed Separate Return – IRS DRT was not displayed

L Student is married and tax return filing status is Head of Household – IRS DRT was not displayed

M Conflict between the student’s marital status and tax return filing status – IRS DRT was not displayed

Blank IRS DRT not available (for example, paper, EDE, or FAA Access)

ISIR PROCESSING CHANGESA

Dependent student has special circumstances or independent student skipped the parent questions – IRS DRT was displayed  

B IRS DRT was displayed to parent  

C Tax return status not equal to “Already completed” – IRS DRT not displayed 

D Marital status date greater than or equal to January 2014 – IRS DRT was displayed

E First three digits of SSN are 666 – IRS DRT was not displayed  

F Non-married parent or both married parents entered all zeroes in SSN – IRS DRT not displayed

G Neither married parent entered a valid SSN – IRS DRT not displayed

H Parent amended his/her tax return – IRS DRT not displayed

J Parent filed a Puerto Rican or Foreign tax return – IRS DRT not displayed  

K Parents are married and tax return filing status is Married Filed Separate Return – IRS DRT not displayed  

L Parents are married and tax return filing status is Head of Household – IRS DRT not displayed

M Conflict between the parents’ marital status and tax return filing status – IRS DRT not displayed

N Parents’ marital status is “Unmarried and both parents living together” – IRS DRT was displayed  

Blank IRS DRT not available (i.e., paper, EDE, or FAA Access)