Tax Transcript Decoder©
COMPARISON OF 2018 TAX RETURN AND TAX TRANSCRIPT DATA
2020-21 Award Year (Version 1.0)
© 2019 NASFAA. All rights reserved.
Information in this publication is current as of October 31, 2019.
© 2019 by National Association of Student Financial Aid Administrators (NASFAA). All rights reserved.
NASFAA has prepared this document for use only by personnel, licensees, and members. The information contained herein is protected by copyright.
No part of this document may be reproduced, translated, or transmitted in any form or by any means, electronically or mechanically, without prior written
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CONSEQUENTIAL DAMAGES RESULTING FROM THE FURNISHING, PERFORMANCE, OR USE OF THIS MATERIAL.
This publication contains material related to the federal student aid programs under Title IV of the Higher Education Act and/or Title VII or Title VIII of the
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The Free Application for Federal Student Aid (FAFSA
®
) is a registered trademark of the U.S. Department of Education.
NASFAA reserves the right to revise this document and/or change product features or specifications without advance notice.
November 2019
2
Tax Transcript Decoder©
Comparison of 2018 Tax Return and Tax Transcript Data
FAFSA instructions direct applicants to obtain information from certain lines on IRS income tax returns and schedules. For
the most part, the instructions identify the relevant lines on the tax form by line number. These line item numbers do not
appear on IRS tax transcripts. Instead, each item is identified by name. When verifying FAFSA data using tax transcripts, it is
important to identify the correct answer.
The following pages contain a sample tax return and corresponding tax return transcript. Relevant line items have been
highlighted as follows:
Red: information to help cross-reference tax return line items with corresponding data on the tax return transcript.
Yellow: tax return line items that are required verification data elements for the 2020-21 award year.
Blue: tax return line items listed in the FAFSA instructions, which should be reviewed for potential conflicting information.
2018 Tax Return Line Items for 2020-21 Verification
1040 and Schedules
2020-21
FAFSA Question
AGI 1040 Line 7 36 (S) and 84 (P)
Income tax paid*
1040 Line 13 minus
1040 Schedule 2, Line 46
37 (S) and 85 (P)
Education credits 1040 Schedule 3, Line 50 43a (S) and 91a (P)
IRA deductions and payments 1040 Schedule 1, Line 28 + Line 32 44b (S) and 92b (P)
Tax-exempt interest income 1040 Line 2a 44d (S) and 92d (P)
Untaxed portions of IRA, pension, and
annuity distributions (withdrawals)*
1040 Line 4a minus 4b
(exclude rollovers)
44e (S) and 92e (P)
2018 Tax Return Transcript Line Items for 2021-21 Verification
Tax Transcript
2020-21
FAFSA Question
AGI “ADJUSTED GROSS INCOME PER COMPUTER” 36 (S) and 84 (P)
Income tax paid*
“INCOME TAX AFTER CREDITS PER COMPUTER”
minus
“EXCESS ADVANCE PREMIUM TAX CREDIT
REPAYMENT AMOUNT”
37 (S) and 85 (P)
Education credits “EDUCATION CREDIT PER COMPUTER” 43a (S) and 91a (P)
IRA deductions and payments
“KEOGH/SEP CONTRIBUTION DEDUCTION”
plus
“IRA DEDUCTION PER COMPUTER”
44b (S) and 92b (P)
Tax-exempt interest income “TAX-EXEMPT INTEREST” 44d (S) and 92d (P)
Untaxed portions of IRA, pension, and
annuity distributions (withdrawals)*
“IRAs, PENSIONS AND ANNUITIES”
minus
“TAXABLE IRAs, PENSIONS AND ANNUITIES”**
(exclude rollovers)
44e (S) and 92e (P)
*If negative, enter zero.
**The U.S. Department of Education (ED) is still awaiting IRS confirmation of the Tax Return Transcript line items for “TAXABLE IRAs, PENSIONS
AND ANNUITIES.”
3
© 2019
NASFAA. All rights reserved.
Sample IRS Form 1040, Page 1: Lucy and John Matterocci
4
© 2019
NASFAA. All rights reserved.
Sample IRS Form 1040, Page 2: Lucy and John Matterocci
*Income earned from work: IRS Form 1040--Line 1 , Schedule 1--Lines 12 and 18 , Schedule K-1 (IRS Form 1065)--Box 14 (Code A). If any individual earning item is
negative, do not include that item in your calculation.
5
© 2019
NASFAA. All rights reserved.
Sample IRS Form 1040 Schedule 1: Lucy and John Matterocci
*Income earned from work: IRS Form 1040--Line 1 , Schedule 1--Lines 12 and 18 , Schedule K-1 (IRS Form 10
65)--Box 14 (Code A). If any individual earning item is
negative, do not include that item in your calculation.
6
© 2019
NASFAA. All rights reserved.
Sample IRS Form 1040 Schedule 2 (not filed by Lucy and John)
7
© 2019
NASFAA. All rights reserved.
Sample IRS Form 1040 Schedule 3 (not filed by Lucy and John)
8
© 2019 NASFAA. All rights reserved.
Sample Tax Transcript 1040: Lucy and John Matterocci
1040: p.1
1040: 1
1040: 2a
Sch 1: 12
1040: 4a
1040: 4b
1040: p.1
*
**
*Income earned from work: IRS Form 1040–Line 1 , Schedule 1–Lines 12 and 18 , Schedule K-1 (IRS Form 1065)–Box 14 (Code A). If any individual earning item
is negative, do not include that item in your calculation.
**Value of '0' denotes schedule was not filed.
© 2019 NASFAA. All rights reserved.
Internal Revenue Service
United States Department of the Treasury
This Product Contains Sensitive Taxpayer Data
Request Date: 08-30-2019
Response Date: 08-30-2019
Tracking Number: XXXXXXXXXXXX
Tax Return Transcript
SSN Provided: XXX-XX-1614
Tax Period Ending: Dec. 31, 2018
The following items reflect the amount as shown on the return (PR), and the amount as
adjusted (PC), if applicable. They do not show subsequent activity on the account.
SSN: XXX-XX-1614
SPOUSE SSN: XXX-XX-7145
NAME(S) SHOWN ON RETURN: LUCY JOHN MATT
FILING STATUS:
FORM NUMBER:
CYCLE POSTED:
RECEIVED DATE:
REMITTANCE:
EXEMPTION NUMBER:
OTHER DEPENDENT CREDIT TOTAL ELIGIBLE PER COMPUTER:
OTHER DEPENDENT CREDIT TOTAL ELIGIBLE VERIFIED:
EXEMPTION NUMBER:
DEPENDENT 1 NAME CTRL:
Married Filed Joint
1040
20191205
Apr.15, 2019
$0.00
05
01
00
05
DELU
DEPENDENT 1 SSN: XXX-XX-5630
DEPENDENT 2 NAME CTRL: MATT
DEPENDENT 2 SSN: XXX-XX-7982
DEPENDENT 3 NAME CTRL: MATT
DEPENDENT 3 SSN: XXX-XX-5309
DEPENDENT 4 NAME CTRL:
DEPENDENT 4 SSN:
PTIN:
PREPARER EIN:
Income
WAGES, SALARIES, TIPS, ETC:......................................................$122,179.00
TAXABLE INTEREST INCOME: SCH B:....................................................$2,208.00
TAX-EXEMPT INTEREST:...................................................................$0.00
ORDINARY DIVIDEND INCOME: SCH B:.......................................................$0.00
QUALIFIED DIVIDENDS:...................................................................$0.00
REFUNDS OF STATE/LOCAL TAXES:........................................................$814.00
ALIMONY RECEIVED:......................................................................$0.00
BUSINESS INCOME OR LOSS (Schedule C):..................................................$0.00
BUSINESS INCOME OR LOSS: SCH C PER COMPUTER:...........................................$0.00
CAPITAL GAIN OR LOSS: (Schedule D):....................................................$0.00
CAPITAL GAINS OR LOSS: SCH D PER COMPUTER:.............................................$0.00
OTHER GAINS OR LOSSES (Form 4797):.....................................................$0.00
TOTAL IRA DISTRIBUTIONS:...............................................................$0.00
TAXABLE IRA DISTRIBUTIONS:.............................................................$0.00
IRAs, PENSIONS AND ANNUITIES:..........................................................$0.00
TAXABLE IRAs, PENSIONS AND ANNUITIES:..................................................$0.00
SCHEDULE 2 INDICATOR:......................................................................0
SCHEDULE 3 INDICATOR:......................................................................0
9
10
Sch 1: 18
Sch 1: 25
Sch 1: 28
Sch 1: 32
1040: 7
*
*Income earned from work: IRS Form 1040–Line 1, Schedule 1–Lines 12 and 18, Schedule K-1 (IRS Form 1065)
–Box 14 (Code A) . If any individual earning
item is negative, do not include that item in your calculation.
© 2019 NASFAA. All rights reserved.
ADDITIONAL INCOME:.................................................................$8,110.00
ADDITIONAL INCOME PER COMPUTER:....................................................$8,110.00
REFUNDABLE CREDITS PER COMPUTER:.......................................................$0.00
REFUNDABLE EDUCATION CREDIT PER COMPUTER:..............................................$0.00
QUALIFIED BUSINESS INCOME DEDUCTION:...................................................$0.00
RENT/ROYALTY/PARTNERSHIP/ESTATE (Schedule E):..........................................$0.00
RENT/ROYALTY/PARTNERSHIP/ESTATE (Schedule E) PER COMPUTER:.............................$0.00
RENT/ROYALTY INCOME/LOSS PER COMPUTER:.................................................$0.00
ESTATE/TRUST INCOME/LOSS PER COMPUTER:.................................................$0.00
PARTNERSHIP/S-CORP INCOME/LOSS PER COMPUTER PER COMPUTER:..............................$0.00
FARM INCOME OR LOSS (Schedule F):......................................................$0.00
FARM INCOME OR LOSS (Schedule F) PER COMPUTER:.........................................$0.00
UNEMPLOYMENT COMPENSATION:.........................................................$7,296.00
TOTAL SOCIAL SECURITY BENEFITS:........................................................$0.00
TAXABLE SOCIAL SECURITY BENEFITS:......................................................$0.00
TAXABLE SOCIAL SECURITY BENEFITS PER COMPUTER:.........................................$0.00
OTHER INCOME:..........................................................................$0.00
SCHEDULE EIC SE INCOME PER COMPUTER:...................................................$0.00
SCHEDULE EIC EARNED INCOME PER COMPUTER:...............................................$0.00
SCH EIC DISQUALIFIED INC COMPUTER:.....................................................$0.00
TOTAL INCOME:....................................................................$132,497.00
TOTAL INCOME PER COMPUTER:.......................................................$132,497.00
Adjustments to Income
EDUCATOR EXPENSES:.....................................................................$0.00
EDUCATOR EXPENSES PER COMPUTER:........................................................$0.00
RESERVIST AND OTHER BUSINESS EXPENSE:..................................................$0.00
HEALTH SAVINGS ACCT DEDUCTION:.........................................................$0.00
HEALTH SAVINGS ACCT DEDUCTION PER COMPTR:..............................................$0.00
MOVING EXPENSES: F3903:................................................................$0.00
SELF EMPLOYMENT TAX DEDUCTION:.........................................................$0.00
SELF EMPLOYMENT TAX DEDUCTION PER COMPUTER:............................................$0.00
SELF EMPLOYMENT TAX DEDUCTION VERIFIED:................................................$0.00
KEOGH/SEP CONTRIBUTION DEDUCTION:......................................................$0.00
SELF-EMP HEALTH INS DEDUCTION:.........................................................$0.00
EARLY WITHDRAWAL OF SAVINGS PENALTY:...................................................$0.00
ALIMONY PAID SSN:...........................................................................
ALIMONY PAID:..........................................................................$0.00
IRA DEDUCTION:.........................................................................$0.00
IRA DEDUCTION PER COMPUTER:............................................................$0.00
STUDENT LOAN INTEREST DEDUCTION:.......................................................$0.00
STUDENT LOAN INTEREST DEDUCTION PER COMPUTER:..........................................$0.00
STUDENT LOAN INTEREST DEDUCTION VERIFIED:..............................................$0.00
TUITION AND FEES DEDUCTION:............................................................$0.00
TUITION AND FEES DEDUCTION PER COMPUTER:...............................................$0.00
DOMESTIC PRODUCTION ACTIVITIES DEDUCTION:..............................................$0.00
DOMESTIC PRODUCTION ACTIVITIES DEDUCTION PER COMPUTER:.................................$0.00
OTHER ADJUSTMENTS:.....................................................................$0.00
ARCHER MSA DEDUCTION:..................................................................$0.00
ARCHER MSA DEDUCTION PER COMPUTER:.....................................................$0.00
TOTAL ADJUSTMENTS:.....................................................................$0.00
TOTAL ADJUSTMENTS PER COMPUTER:........................................................$0.00
ADJUSTED GROSS INCOME:...........................................................$132,497.00
ADJUSTED GROSS INCOME PER COMPUTER:..............................................$132,497.00
Tax and Credits
65-OR-OVER:...............................................................................NO
BLIND:....................................................................................NO
SPOUSE 65-OR-OVER:........................................................................NO
SPOUSE BLIND:.............................................................................NO
STANDARD DEDUCTION PER COMPUTER:..................................................$24,000.00
ADDITIONAL STANDARD DEDUCTION PER COMPUTER:............................................$0.00
TAX TABLE INCOME PER COMPUTER:...................................................$108,497.00
EXEMPTION AMOUNT PER COMPUTER:.........................................................$0.00
TAXABLE INCOME:..................................................................$108,497.00
TAXABLE INCOME PER COMPUTER:.....................................................$108,497.00
11
Sch 3: 50
Sch 2: 46
1040: 13
Sch 2: 46
*
**
***If Income Tax Paid is negative, use zero.
© 2019 NASFAA. All rights reserved.
TOTAL POSITIVE INCOME PER COMPUTER:..............................................$132,497.00
TENTATIVE TAX:....................................................................$15,748.00
TENTATIVE TAX PER COMPUTER:.......................................................$15.748.00
FORM 8814 ADDITIONAL TAX AMOUNT:.......................................................$0.00
TAX ON INCOME LESS SOC SEC INCOME PER COMPUTER:........................................$0.00
FORM 6251 ALTERNATIVE MINIMUM TAX:.....................................................$0.00
FORM 6251 ALTERNATIVE MINIMUM TAX PER COMPUTER:........................................$0.00
FOREIGN TAX CREDIT:....................................................................$0.00
FOREIGN TAX CREDIT PER COMPUTER:.......................................................$0.00
FOREIGN INCOME EXCLUSION PER COMPUTER:.................................................$0.00
FOREIGN INCOME EXCLUSION TAX PER COMPUTER:.............................................$0.00
EXCESS ADVANCE PREMIUM TAX CREDIT REPAYMENT AMOUNT:....................................$0.00
EXCESS ADVANCE PREMIUM TAX CREDIT REPAYMENT VERIFIED AMOUNT:...........................$0.00
CHILD & DEPENDENT CARE CREDIT:.........................................................$0.00
CHILD & DEPENDENT CARE CREDIT PER COMPUTER:............................................$0.00
CREDIT FOR ELDERLY AND DISABLED:.......................................................$0.00
CREDIT FOR ELDERLY AND DISABLED PER COMPUTER:..........................................$0.00
EDUCATION CREDIT:......................................................................$0.00
EDUCATION CREDIT PER COMPUTER:.........................................................$0.00
GROSS EDUCATION CREDIT PER COMPUTER:...................................................$0.00
RETIREMENT SAVINGS CNTRB CREDIT:.......................................................$0.00
RETIREMENT SAVINGS CNTRB CREDIT PER COMPUTER:..........................................$0.00
PRIM RET SAV CNTRB: F8880 LN6A:........................................................$0.00
SEC RET SAV CNTRB: F8880 LN6B:.........................................................$0.00
TOTAL RETIREMENT SAVINGS CONTRIBUTION: F8880 CMPTR:....................................$0.00
RESIDENTIAL ENERGY CREDIT:.............................................................$0.00
RESIDENTIAL ENERGY CREDIT PER COMPUTER:................................................$0.00
CHILD AND OTHER DEPENDENT CREDIT:..................................................$4,500.00
CHILD AND OTHER DEPENDENT CREDIT PER COMPUTER:.....................................$4,500.00
ADOPTION CREDIT: F8839:................................................................$0.00
ADOPTION CREDIT PER COMPUTER:..........................................................$0.00
FORM 8396 MORTGAGE CERTIFICATE CREDIT:.................................................$0.00
FORM 8396 MORTGAGE CERTIFICATE CREDIT PER COMPUTER:....................................$0.00
F3800, F8801 AND OTHER CREDIT AMOUNT:..................................................$0.00
FORM 3800 GENERAL BUSINESS CREDITS:....................................................$0.00
FORM 3800 GENERAL BUSINESS CREDITS PER COMPUTER:.......................................$0.00
PRIOR YR MIN TAX CREDIT: F8801:........................................................$0.00
PRIOR YR MIN TAX CREDIT: F8801 PER COMPUTER:...........................................$0.00
F8936 ELECTRIC MOTOR VEHICLE CREDIT AMOUNT:............................................$0.00
F8936 ELECTRIC MOTOR VEHICLE CREDIT PER COMPUTER:......................................$0.00
F8910 ALTERNATIVE MOTOR VEHICLE CREDIT AMOUNT:.........................................$0.00
F8910 ALTERNATIVE MOTOR VEHICLE CREDIT PER COMPUTER:...................................$0.00
OTHER CREDITS:.........................................................................$0.00
TOTAL CREDITS:.....................................................................$4,500.00
TOTAL CREDITS PER COMPUTER:........................................................$4,500.00
INCOME TAX AFTER CREDITS PER COMPUTER:............................................$11,248.00
*** “Income Tax After Credits Per Computer”
$11,248.00
‒ ** “Excess Advance Premimum Tax Credit Repayment Amount”
‒
$0.00
= **** Income Tax Paid
= $11,248.00
Other Taxes
SE TAX:................................................................................$0.00
SE TAX PER COMPUTER:...................................................................$0.00
SOCIAL SECURITY AND MEDICARE TAX ON UNREPORTED TIPS:...................................$0.00
SOCIAL SECURITY AND MEDICARE TAX ON UNREPORTED TIPS PER COMPUTER:......................$0.00
TAX ON QUALIFIED PLANS F5329 (PR):.....................................................$0.00
TAX ON QUALIFIED PLANS F5329 PER COMPUTER:.............................................$0.00
IRAF TAX PER COMPUTER:.................................................................$0.00
TP TAX FIGURES (REDUCED BY IRAF) PER COMPUTER:....................................$11,248.00
IMF TOTAL TAX (REDUCED BY IRAF) PER COMPUTER:.....................................$11,248.00
TOTAL OTHER TAXES PER COMPUTER:........................................................$0.00
UNPAID FICA ON REPORTED TIPS:..........................................................$0.00
F8959-8960 OTHER TAXES:................................................................$0.00
‒
12
© 2019 NASFAA. All rights reserved.
TOTAL OTHER TAXES:.....................................................................$0.00
RECAPTURE TAX: F8611:..................................................................$0.00
HOUSEHOLD EMPLOYMENT TAXES:............................................................$0.00
HOUSEHOLD EMPLOYMENT TAXES PER COMPUTER:...............................................$0.00
HEALTH CARE RESPONSIBILITY PENALTY:....................................................$0.00
HEALTH CARE RESPONSIBILITY PENALTY VERIFIED:...........................................$0.00
HEALTH COVERAGE RECAPTURE: F8885:......................................................$0.00
RECAPTURE TAXES:.......................................................................$0.00
TOTAL ASSESSMENT PER COMPUTER:....................................................$11,248.00
TOTAL TAX LIABILITY TP FIGURES:...................................................$11,248.00
TOTAL TAX LIABILITY TP FIGURES PER COMPUTER:......................................$11,248.00
Payments
FEDERAL INCOME TAX WITHHELD:......................................................$11,272.00
HEALTH CARE: INDIVIDUAL RESPONSIBILTY:.................................................$0.00
HEALTH CARE FULL-YEAR COVERAGE INDICATOR:..................................................1
ESTIMATED TAX PAYMENTS:................................................................$0.00
OTHER PAYMENT CREDIT:..................................................................$0.00
REFUNDABLE EDUCATION CREDIT:...........................................................$0.00
REFUNDABLE EDUCATION CREDIT PER COMPUTER:..............................................$0.00
REFUNDABLE EDUCATION CREDIT VERIFIED:..................................................$0.00
REFUNDABLE CREDITS:....................................................................$0.00
EARNED INCOME CREDIT:..................................................................$0.00
EARNED INCOME CREDIT PER COMPUTER:.....................................................$0.00
EARNED INCOME CREDIT NONTAXABLE COMBAT PAY:............................................$0.00
SCHEDULE 8812 NONTAXABLE COMBAT PAY:...................................................$0.00
EXCESS SOCIAL SECURITY & RRTA TAX WITHHELD:............................................$0.00
SCHEDULE 8812 TOT SS/MEDICARE WITHHELD:................................................$0.00
SCHEDULE 8812 ADDITIONAL CHILD TAX CREDIT:.............................................$0.00
SCHEDULE 8812 ADDITIONAL CHILD TAX CREDIT PER COMPUTER:................................$0.00
SCHEDULE 8812 ADDITIONAL CHILD TAX CREDIT VERIFIED:....................................$0.00
AMOUNT PAID WITH FORM 4868:............................................................$0.00
FORM 2439 REGULATED INVESTMENT COMPANY CREDIT:.........................................$0.00
FORM 4136 CREDIT FOR FEDERAL TAX ON FUELS:.............................................$0.00
FORM 4136 CREDIT FOR FEDERAL TAX ON FUELS PER COMPUTER:................................$0.00
HEALTH COVERAGE TX CR: F8885:..........................................................$0.00
SEC 965 TAX INSTALLMENT:...............................................................$0.00
SEC 965 TAX LIABILITY:.................................................................$0.00
PREMIUM TAX CREDIT AMOUNT:.............................................................$0.00
PREMIUM TAX CREDIT VERIFIED AMOUNT:....................................................$0.00
PRIMARY NAP FIRST TIME HOME BUYER INSTALLMENT AMT:.....................................$0.00
SECONDARY NAP FIRST TIME HOME BUYER INSTALLMENT AMT:...................................$0.00
FIRST TIME HOMEBUYER CREDIT REPAYMENT AMOUNT:..........................................$0.00
FORM 5405 TOTAL HOMEBUYERS CREDIT REPAYMENT PER COMPUTER:..............................$0.00
SMALL EMPLOYER HEALTH INSURANCE PER COMPUTER:..........................................$0.00
SMALL EMPLOYER HEALTH INSURANCE PER COMPUTER (2):......................................$0.00
FORM 2439 AND OTHER CREDITS:...........................................................$0.00
TOTAL PAYMENTS:...................................................................$11,272.00
TOTAL PAYMENTS PER COMPUTER:......................................................$11,272.00
Refund or Amount Owed
REFUND AMOUNT:.......................................................................$-24.00
APPLIED TO NEXT YEAR’S ESTIMATED TAX:..................................................$0.00
ESTIMATED TAX PENALTY:.................................................................$0.00
TAX ON INCOME LESS STATE REFUND PER COMPUTER:..........................................$0.00
BAL DUE/OVER PYMT USING TP FIG PER COMPUTER:.........................................$-24.00
BAL DUE/OVER PYMT USING COMPUTER FIGURES:............................................$-24.00
FORM 8888 TOTAL REFUND PER COMPUTER:...................................................$0.00
Third Party Designee
THIRD PARTY DESIGNEE ID NUMBER:.............................................................
AUTHORIZATION INDICATOR:...................................................................0
THIRD PARTY DESIGNEE NAME:..................................................................
113
© 2019 NASFAA. All rights reserved.
Interest and Dividends
GROSS SCHEDULE B INTEREST:.........................................................$2,208.00
TAXABLE INTEREST INCOME:...........................................................$2,208.00
EXCLUDABLE SAVINGS FROM BOND INT:......................................................$0.00
GROSS SCHEDULE B DIVIDENDS:............................................................$0.00
DIVIDEND INCOME:.......................................................................$0.00
FOREIGN ACCOUNTS IND:...................................................................NONE
REQUIRED TO FILE FINCEN FORM 114:.......................................................NONE
Form 8863 – Education Credits (Hope and Lifetime Learning Credits)
PART III – ALLOWABLE EDUCATION CREDITS
GROSS EDUCATION CR PER COMPUTER:.......................................................$0.00
TOTAL EDUCATION CREDIT AMOUNT:.........................................................$0.00
TOTAL EDUCATION CREDIT AMOUNT PER COMPUTER:............................................$0.00
This Product Contains Sensitive Taxpayer Data
This page intentionally left blank.
14
Appendices
Appendix A
Sample 2018 W-2 Form, Reference Guide for Box 12 Codes, and Sample Form W-2 Wage and Tax Statement
Appendix B
Criteria for 2020-21 Simplified Needs Formulas and Automatic Zero EFC Calculation
Appendix C
2018 IRS Form 1040: Indicators That Schedule 1, 2 or 3 was Required
Appendix D
Current Year Transcript Availability
Appendix E
References, Resources and Websites – Tax Returns and Transcripts
15
© 2019
NASFAA. All rights reserved.
Appendix A
Sample 2018 W-2 Form
In addition to wages earned, the W-2 form may reveal sources of untaxed income, such as payments to tax-deferred pension and
savings plan amounts reported in boxes 12a through 12d, code D, E, F, G, H and S.
Schools are not required to review income listed in box 14, however if you are aware that a box 14 item should be reported (i.e. clergy
parsonage allowances) then you would count that amount as untaxed income.
Form W-2 Reference Guide for Box 12 Codes
A
Uncollected social security or RRTA tax on tips
K
20% excise tax on excess golden parachute
payments
V
Income from exercise of nonstatutory stock
option(s)
B
Uncollected Medicare tax on tips
L
Substantiated employee business expense
reimbursements
W
Employer contributions (including amounts
employee elected to contribute using a cafeteria
plan) to employee’s health savings account
C
Taxable cost of group-term life insurance over
$50,000
M
Uncollected social security or RRTA tax on
taxable cost of group-term life insurance over
$50,000 (former employees only)
Y
Deferrals under a section 409A nonqualified
deferred compensation plan
D
Elective deferrals to a section 401(k) cash or
deferred arrangement (including deferrals
under a SIMPLE 401(k) arrangement)
N
Uncollected Medicare tax on taxable cost of
group-term life insurance over $50,000 (former
employees only)
Z
Income under a nonqualified deferred
compensation plan that fails to satisfy section
409A
E
Elective deferrals under a section 403(b)
salary reduction agreement
P
Excludable moving expense reimbursements
paid directly to a member of the U.S. Armed
Forces
AA
Designated Roth contributions under a section
401(k) plan
F
Elective deferrals under a section 408(k)(6)
salary reduction SEP
Q
Nontaxable combat pay
BB
Designated Roth contributions under a section
403(b) plan
G
Elective deferrals and employer contributions
(including nonelective deferrals) to a section
457(b) deferred compensation plan
R
Employer contributions to an Archer MSA
DD
Cost of employer-sponsored health coverage
H
Elective deferrals to a section 501(c)(18)(D)
tax-exempt organization plan
S
Employee salary reduction contributions under
a section 408(p) SIMPLE plan
EE
Designated Roth contributions under a
governmental section 457(b) plan
J
Nontaxable sick pay
T
Adoption benefits
FF
Permitted benefits under a qualified small
employer health reimbursement arrangement
(For additional codes and complete descriptions, visit https://www.irs.gov/pub/irs-pdf/fw2_18.pdf)
16
© 2019 NASFAA. All rights reserved.
Sample 2018 W-2 Wage and Tax Statement
Internal Revenue Service
United States Department of the Treasury
This Product Contains Sensitive Taxpayer Data
Request Date: 08-30-2019
Response Date: 08-30-2019
Tracking Number: XXXXXXXXXXXX
*
Wage and Income Transcript
SSN Provided: XXX-XX-1614
Tax Period Ending: December 2018
Form W-2 Wage and Tax Statement
Employer:
Employer Identification Number (EIN):
Employee:
Employee’s Social Security Number: XXX-XX-1614
LUCY JANI MATT
1234 W
Submission Type:................................................Original document
Wages, Tips and Other Compensation:....................................$47,355.00 - - - - - Box 1
Federal Income Tax Withheld:............................................$4,072.00
-
- Box 2
Social Security Wages:.................................................$54,206.00
- - - - - Box 3
Social Security Tax Withheld:...........................................$3,360.00
-
- Box 4
Medicare Wages and Tips:...............................................$54,206.00
- - - - - Box 5
Medicare Tax Withheld:....................................................$786.00
- - Box 6
Social Security Tips:.......................................................$0.00
- - - - - Box 7
Allocated Tips:.............................................................$0.00
- - Box 8
Dependent Care Benefits:....................................................$0.00
- - - - - Box 10
Deferred Compenensation:................................................$3,491.00
- - Box 12a-d (D, E, F, G, H)
Code “Q” Nontaxable Combat Pay:.............................................$0.00
Code “W” Employer Contributions to a Health Savings Account:................$0.00
Code “Y” Deferrals under a section 409A nonqualified Deferred Compensation
plan:.......................................................................$0.00
Code “Z” Income under section 409A on a nonqualified Deferred Compensation
plan:.......................................................................$0.00
Code “R” Employer’s Contribution to MSA:....................................$0.00
Code “S” Employer’s Contribution to Simple Account:.........................$0.00
- - - - - Box 12a-d (S)
Code “T” Expenses Incurred for Qualified Adoptions:.........................$0.00
Code “V” Income from exercise of non-statutory stock options:...............$0.00
Code “AA” Designated Roth Contributions under a Section 401(k) Plan:........$0.00
Code “BB” Designated Roth Contributions under a Section 403(b) Plan:........$0.00
Code “DD” Cost of Employer-Sponsored Health Coverage:...................$8,850.00
Code “EE” Designated ROTH Contributions Under a Governmental Section 457(b)
Plan:.......................................................................$0.00
Code “FF” Permitted benefits under a qualified small employer health
reimbursement arrangement:..................................................$0.00
* Current tax year information may not be available until July.
Note: Payments to tax-deferred pension and retirement savings plans under “Deferred Compensation” and “Code ‘S’ Employer’s Contribution to Simple
Account” are not required to be verified unless there is conflicting information. “Deferred Compensation” is assumed to include W-2 Box 12a to 12d,
Codes D, E, F, G, and H. If the total for this line plus the line for Code ‘S’ do not match the amount reported on the FAFSA, the school will need to collect
additional documentation from the student or parent, as applicable. Schools may obtain a signed statement indicating the correct amounts or some
other documentation the school deems appropriate to resolve the conflict.
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Appendix B
Criteria for 2020-21 Simplified Needs Formulas and Automatic Zero EFC Calculation
The following criteria is used to determine if students qualify to have their EFCs calculated using a simplified formula.
Simplified
(assets not considered)
Automatic Zero EFC
Formula A
Dependent student
Parents had a 2018 AGI of $49,999 or less (for tax
filers), or if non-filers, income earned from work in
2018 is $49,999 or less; and
Either
- Parents filed a 2018 IRS Form 1040, but did not
file a Schedule 1*, filed a tax form from a Trust
Territory**, or were not required to file any
income tax return or
- Anyone in the parents’ household size (as
defined on the FAFSA) received any designated
means-tested federal benefits*** during 2018 or
2019, or
- Parent is a dislocated worker.
Parents had a 2018 AGI of $26,000 or less (for tax
filers), or if non-filers, income earned from work in
2018 is $26,000 or less; and
Either
- Parents filed a 2018 IRS Form 1040, but did not
file a Schedule 1*, filed a tax form from a Trust
Territory**, or were not required to file any
income tax return or
- Anyone in the parents’ household size (as
defined on the FAFSA) received any designated
means-tested federal benefits*** during 2018 or
2019, or
- Parent is a dislocated worker.
Formula B
Independent student
without dependents
(other than a spouse)
Student (and spouse, if any) had a 2018 AGI of
$49,999 or less (for tax filers), or if non-filers,
income earned from work in 2018 is $49,999 or
less; and
Either
- Student (and spouse, if any) filed a 2018 IRS
Form 1040, but did not file a Schedule 1*, filed a
tax form from a Trust Territory**, or were not
required to file any income tax return or
- Anyone in the student’s household size (as
defined on the FAFSA) received any designated
means-tested federal benefits*** during 2018 or
2019, or
- Student (or spouse, if any) is a dislocated worker.
Not applicable.
Formula C
Independent student
with dependents
(other than a spouse)
Student (and spouse, if any) had a 2018 AGI of
$49,999 or less (for tax filers), or if non-filers,
income earned from work in 2018 is $49,999 or
less; and
Either
- Student (and spouse, if any) filed a 2018 IRS
Form 1040, but did not file a Schedule 1*, filed a
tax form from a Trust Territory**, or were not
required to file any income tax return or
- Anyone in the student’s household size (as
defined on the FAFSA) received any designated
means-tested federal benefits*** during 2018 or
2019, or
- Student (or spouse, if any) is a dislocated worker.
Student (and spouse, if any) had a 2018 AGI of
$26,000 or less (for tax filers), or if non-filers,
income earned from work in 2018 is $26,000 or
less; and
Either
- Student (and spouse, if any) filed a 2018 IRS
Form 1040, but did not file a Schedule 1*, filed a
tax form from a Trust Territory**, or were not
required to file any income tax return or
- Anyone in the student’s household size (as
defined on the FAFSA) received any designated
means-tested federal benefits*** during 2018 or
2019, or
- Student (or spouse, if any) is a dislocated worker.
*May also qualify if Schedule 1 was filed to report only a capital gain (line 13 – may not be a negative value), unemployment compensation (line 19),
other income to report an Alaska Permanent Fund dividend (line 21 – may not a negative value), educator expenses (line 23), IRA deduction (line 32),
and/or student loan interest deduction (line 33).
**Trust Territory: Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Republic of the Marshall Islands, the Federated
States of Micronesia, or Palau.
***Benefits include Medicaid, Supplemental Security Income (SSI), Supplemental Nutrition Assistance (SNAP), Free or Reduced Price School Lunch,
Temporary Assistance for Needy Families (TANF), and Special Supplemental Nutrition Program for Women, Infants and Children (WIC).
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© 2019
NASFAA. All rights reserved.
Appendix C
2018 IRS Form 1040 – Indicators That Schedule 1, 2 or 3 was Required
Many taxpayers will only need to file Form 1040 and no schedules. Those with more complicated tax returns
will need to complete one or more of the 2018 Form 1040 Schedules along with their Form 1040. These
taxpayers include people claiming certain deductions or credits or owing additional taxes. Below is a general
guide indicating whether Schedules 1, 2, or 3 need to be filed based on specific circumstances. Under these
conditions, the school should receive a copy of that schedule to complete verification.
IF YOU… THEN USE…
Have additional income, such as capital gains, unemployment compensation, prize or award money, or
gambling winnings.
Have any deductions to claim, such as student loan interest deduction, self-employment tax, or educator
expenses.
1040 Line 6: Schedule 1 is completed if there is an amount on the inner line of 1040 Line 6
(representing an amount from Schedule 1, Line 22).
1040 Line 7: Schedule 1 is completed if the amount on 1040 Line 7 is not equal to the amount on
Line 6 (representing an amount from Schedule 1, Line 36).
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NEW: 2020-21 FAFSA questions #35 (S) and #82 (P) ask if Schedule 1 was (or will be) filed with a 2018 tax
return. A note on p. 9 of the FAFSA reads:
Answer “No” if you (and if married, your spouse) did not file a Schedule 1.
Answer “No” if you (and if married, your spouse) did or will file a Schedule 1 to report only one or more of
the following items:
1. Capital gain (line 13 – may not be a negative value)
2. Unemployment compensation (line 19)
3. Other income to report an Alaska Permanent Fund dividend (line 21 – may not be a negative value)
4. Educator expenses (line 23)
5. IRA deduction (line 32)
6. Student loan interest deduction (line 33)
Answer “Yes” if you (or if married, your spouse) filed or will file a Schedule 1 and reported additional
income or adjustments to income on any lines other than or in addition to the six exceptions listed above.
Schedule 1
Owe alternative minimum tax or need to make an excess advance premium tax credit repayment.
1040 Line 11: Schedule 2 is completed if the box for 1040 Line 11b is checked.
Schedule 2
Can claim a nonrefundable credit other than the child tax credit or the credit for other dependents, such
as the foreign tax credit, education credits, or general business credit.
1040 Line 12: Schedule 3 is completed if the box for 1040 Line 12b is checked.
Schedule 3
Note: Besides Schedules 1, 2, and 3, the school does not need to collect copies of IRS schedules of forms that are attached to the
tax return, unless there is conflicting information in the student’s file that needs to be resolved.
Adapted from: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
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© 2019
NASFAA. All rights reserved.
Sample 2018 IRS Form 1040 – Page 2
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© 2019
NASFAA. All rights reserved.
Appendix D
Current Year Transcript Availability
Use the table below to determine the general timeframe when you can request a transcript for a current
year Form 1040 return filed on or before the April due date. Availability varies based on the method you
used to file your return and whether you have a refund or balance due.
Note: If you made estimated tax payments and/or applied your overpayment from a prior year tax return
to your current year tax return, you can request a tax account transcript to confirm these payments or
credits a few weeks after the beginning of the calendar year prior to filing your current year return.
When your original return
shows a …
and you filed electronically,
then
and you filed on paper, then
refund amount or no balance
due,
allow 2-3 weeks after return
submission before you request
a transcript.
allow 6-8 weeks after you
mailed your return before you
request a transcript.
balance due and you paid in full
with your return,
allow 2-3 weeks after return
submission before you request
a transcript.
we process your return in June
and you can request a transcript
in mid to late June.
Note: we process all payments
upon receipt.
balance due and you paid in full
after submitting the return,
allow 3-4 weeks after full
payment before you request a
transcript.
balance due and you didn’t pay
in full,
we process your return in mid-
May and you can request a
transcript by late May.
https://www.irs.gov/individuals/transcript-availability
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© 2019
NASFAA. All rights reserved.
Appendix E
References, Resources and Websites – Tax Returns and Transcripts
U.S. Department of Education
Federal Registers
Subject: FAFSA Information to be Verified for the 2020-21 Award Year
https://ifap.ed.gov/fregisters/FR052419.html
Electronic Announcements
Subject: 2020-21 Verification Suggested Text Package
https://ifap.ed.gov/eannouncements/073119VerificationSuggestedTextPackage20202021.html
Subject: IRS Announces End to Faxing and Third-Party Mailings of Tax Transcripts
https://ifap.ed.gov/eannouncements/061219IRSAnnEndFaxThirdPartyMailTaxTranscripts.html
Student Aid Eligibility Worksheets
Subject: 2020-21 Free Application for Federal Student Aid (FAFSA®), FAFSA on the Web Worksheet, and the
Student Aid Eligibility Worksheet for Question 23
https://ifap.ed.gov/drugworksheets/2021StudentAidEligibilityWorksheetQ23.html
2019-20 Federal Student Aid Handbook
Application and Verification Guide
- Chapter 2: Filling Out the FAFSA
- Chapter 4: Verification, Updates, and Corrections
https://ifap.ed.gov/fsahandbook/1920FSAHbkAVG.html
Program Integrity Questions and Answers - Verification
https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html
Federal Student Aid Glossary and Acronyms
https://ifap.ed.gov/fsahandbook/attachments/1819FSAHbkAppendixA.pdf
Internal Revenue Service
Current Year Transcript Availability
https://www.irs.gov/individuals/transcript-availability
Secure Access: How to Register for Certain Online Self-Help Tools
https://www.irs.gov/individuals/secure-access-how-to-register-for-certain-online-self-help-tools
Transcript Types and Ways to Order Them
https://www.irs.gov/individuals/tax-return-transcript-types-and-ways-to-order-them
Get Transcript FAQs
https://www.irs.gov/individuals/get-transcript-faqs
4506T-EZ: Short Form Request for Individual Tax Return Transcript
https://www.irs.gov/pub/irs-pdf/f4506tez.pdf
4506-T: Request for Transcript of Tax Return (transcript and other return information)
https://www.irs.gov/pub/irs-pdf/f4506t.pdf
Here Are Five Facts About the New Form 1040
https://www.irs.gov/newsroom/here-are-five-facts-about-the-new-form-1040
2018 IRS Publication 17, p. 3: Form 1040 Redesign – Helpful Hints
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
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