One in every three FAFSAs submitted to the Department of Education's Central Processing System is selected for a process called "verification". This does not mean anything was done wrong when completing the FAFSA, but that the form has been randomly selected by the Central Processing System to have that applicant's information "verified".
The burden is then placed on the Financial Aid Office to "verify" the information submitted on the FAFSA. To do this, the Financial Aid Office will need the student (and if dependent, a parent) to complete a Verification Worksheet. This form helps with the verification process by giving more information about the student's household. The Financial Aid Office is also required to verify the student's (and if dependent, the parent's) federal income tax return information. To do this, the IRS Data Retrieval Tool may be used. This tool brings tax information directly over from the IRS database so that the Financial Aid Office will not be required to do any additional steps to verify this information. There are non-filer instructions given on the Verification Worksheet for those individuals who did not file a federal income tax return.
If a student (or if dependent, a parent) is unable or unwilling to use the IRS Data Retrieval Tool, then the Financial Aid Office will need an IRS Tax Return Transcript submitted. There are directions given on the Verification Worksheet on how to obtain an IRS Tax Return Transcript.
If the IRS Data Retrieval Tool was used either initially or as a correction, then only a Verification Worksheet will need to be completed and submitted to the Financial Aid Office. If the IRS Data Retrieval Tool was never used and an IRS Tax Return Transcript was ordered and received, then both the Verification Worksheet and the IRS Tax Return Transcript will need to be submitted to the Financial Aid Office.
Once the Financial Aid Office has received the Verification Worksheet and have verified the tax information, processing can then move forward for awarding financial aid. If it is determined that a correction needs to be made to the FAFSA information, then the Financial Aid Office will submit the correction(s) and, in 3-5 days, receive back a corrected form. Financial aid awards will then be processed.