ADVANCED VERIFICATION

1. ADVANCED VERIFICATION Let�s Get This Party Started!

2. Important Tools The Application and Verification Guide 34 CFR 668 , Subpart E FAFSA www.ifap.ed.gov Verification Worksheets www.irs.gov IRS Publication 17

3. Required Verification Policies & Procedures General Policy � In FA Office P & P Manual May post and/or include in �Consumer Guide� Must provide each selected applicant a written statement explaining: Documents required for Verification Student Responsibilities (deadlines and consequences of missing them, corrections) Notification Methods (notice of change in award and timeframes for notification)

4. Required Verification Items Adjusted Gross Income US Income Tax Paid Certain Untaxed Income and Benefits Household Size Household Members Enrolled in College

5. AGI/Taxes Paid Verification SIGNED copy of paper US tax return SIGNED copy of e-filed US tax return Acceptable in format of the e-file provider (i.e., may not look like a standard form) IRS Tax Transcript Photocopies, faxes and digital images are acceptable (signature) SIGNED, hand-written duplicates of a filed return are acceptable

6. �Certain� Untaxed Income Untaxed income reported on the tax return Tax-exempt interest Untaxed portions of IRA distribution Untaxed portions of pensions IRA deductions and payments to SEP Payments to tax-deferred pension/savings plans (found on W-2)

7. continued� Other untaxed incomes not found on return Child support received Housing/food/living allowances paid to members of the military, clergy and others Veterans NON-EDUCATIONAL benefits Other, such as workers� compensation/disability

8. DO NOT VERIFY / INCLUDE Earned Income Credit Additional Child Tax Credit Welfare Untaxed social security benefits SSI WIA Education benefits Combat pay Foreign Income Exclusion Credit for Federal Tax on Special Fuels

9. continued� In-Kind Income �In-kind support is other than money, for example, friends or relatives giving the student food or allowing him to live with them rent-free.� Direct payments of cash are NOT in-kind support and must be reported. In addition, if someone pays a bill in the student�s name (the STUDENT�S obligation) on behalf of the student, the amount counts as cash support and must be reported.

10. Verification of Household Size and Number in College Can be collected on the federal Verification Worksheet Can only include household members that receive more than � of their support from the parents/student, as applicable For a Dependent student, can not include a parent in the number in postsecondary school

11. Verification Worksheets Correct Award Year Correct Dependency Status Scrutinize Household Members Full name of College should be provided Item C, # 2 and 3 MUST be completed Item D, # 2 and 3 MUST be completed Student and Parent signature is required Spouse signature is optional

12. Conflicting Information Prohibited from disbursing aid when conflict exists Resolution Required under 34 CFR 668.16(f) Independent of and in addition to Verification Responsible for data contained in other college offices (i.e., admissions, registrar, etc) Increased expectation of knowledge of IRS requirements Responsible to review subsequent ISIR transactions

13. Discrepant Tax Data Obligated to know: Whether a person was required to file a tax return What the correct filing status for a person should be That an individual can not be claimed as an exemption by more than one person Utilize IRS Publication 17 Pages 5-8 explain income levels requiring a person to file Pages 8-9 provide the instructions on which form a person should file Pages20-25 explain the filing status requirements

14. Who is REQUIRED TO FILE? Generally, if an individual earned $8950 or more (2008 tax year), he/she is required to file A student who is claimed by another must file if he/she earned $5450 or more (or $900 in unearned income) If student or parent was required to file and did not, this constitutes conflicting information and NO DISBURSEMENTS can be made until RESOLVED Resolution: Individual needs to file and provide a signed copy of return

15. What is the CORRECT FILING STATUS? A married couple has only two choices�married filing jointly or married filing separately In order to file as Head of Household, a married individual must be �considered unmarried� as evidenced by having been separated from spouse for at least the last six months of the year When student/parents indicate marital status of MARRIED, be sure you have tax information from both parties

16. Claiming an Exemption The parent(s) may claim the student as an exemption (personal exemption�different from standard or itemized deductions) The student may claim him/herself on his/her own return (BE CAREFUL: On the 1040EZ the personal exemption and standard deduction amounts are combined on line 5) If more than one taxpayer claims the same exemption, this constitutes a conflict RESOLUTION: One party must amend taxes

17. �Reasonable to assume�� If there is a single parent, it is reasonable to assume child support was received If there is an active duty or recently discharged military person in house, it is reasonable to assume housing/living expenses may have been received If there is interest income on the tax return, it is reasonable to assume there may be savings or investments

18. Presenter Colleen T. Russo Corporate Director of Regulatory Affairs DPT Business School 11000 Roosevelt Blvd., Suite 200 Philadelphia, PA 19116 215-673-2275 crusso@dptschool.net