During the FAFSA process, families will hear the term DRT or Data Retrieval Tool. The DRT is an important step in the financial aid process. This is the step in the financial aid process that links the FAFSA with the IRS tax return. If a family skips the DRT step, it may cause additional work for the family since colleges require this as part of the financial verification process.
What is the IRS Data Retrieval Tool?
The DRT allows families to easily get access to their IRS tax return and transfer the data directly into their FAFSA from the IRS website. It notifies the college that the information submitted on the FAFSA is the same information that was submitted to the IRS.
This tool updates the FAFSA information with the actual tax information. The DRT process verifies only the income information for the college’s financial aid office and prevents fraud. For families, this is the most efficient way to guarantee that your FAFSA has the most accurate tax information.
Eligibility of the DRT tool
The IRS data retrieval tool (DRT) is available to parents who have completed their personal income tax and have submitted it to the IRS. This would be IRS form 1040, 1040A, or 1040EZ. For some people, the DRT is not available. This would include people with complicated tax returns or those who file for extensions. If you are in that situation, you should contact the college to ask what information is required to complete the FAFSA verification.
The DRT takes time to process and is fully dependent on how a family files their taxes and when the taxes are paid. It will take two to six weeks after your taxes are submitted and paid. Submitting your taxes electronically increases the speed in which the tax information is available for the DRT process. Paper tax submission will increase the time and delays the college’s verification process.
As stated, the timeline is based on when the taxes are paid. If you are getting a refund then your taxes are paid. If you file electronically and owe additional taxes then the time will not start until the US Treasury processes your check. This could cause an issue with some colleges if they are trying to verify your FAFSA and you are unable to turn on the DRT verification. Parents who file an extension can also have a problem since no tax information is available to access.
Accessing to the DRT System
The federal government makes it easy to access the DRT system. To use the DRT tool, you need to enter through the online FAFSA form. If you have submitted a prior estimate, it will be titled Corrections within the FAFSA system. For the DRT verification to work properly within the FAFSA process, the following conditions must apply:
- Taxpayer must have filed a current 2015 Federal tax return processed by the IRS
- Electronic submission method will provide better availability
- Taxpayer must have a valid Social Security number (SSN)
- Taxpayer must have established a valid FSA ID
- Taxpayer’s address and name must exactly match those on the IRS form
- Access to FSA ID
There are certain situations where the IRS DRT will not be available to be used for the FAFSA verification. They are as follows for student applicants or parents who:
- Taxpayer is submitting an amended tax return for 2015
- Taxpayer is submitting for an extension
- Once submitted, the verification will be done and the award will be reevaluated
- Taxpayer did not need to file a federal tax return
- Taxpayer filed a Puerto Rican or foreign income tax return for 2015
If the dependent student lives with parents who are divorced or separated, it is our recommendation that the student be claimed as an exemption on the parent submitting the FAFSA form. Some preplanning may be required depending on the divorce or separation agreement.
Importance of Verification
Once the student has committed to the college, the school will normally contact the student to request that the DRT process be complete. Since many of the programs are federal or state funded, the college must verify the information before they issue the funds. If you are unable to use the DRT, then the college could request that the family send an IRS Tax Return Transcript. Go to www.irs.gov to find information and the form. This will require a greater effort and can be frustrating at times.
The DRT process is only related to the FAFSA or federal financial aid method. Some colleges require additional tax and income information. Colleges that require the CSS Profile will still require you to submit prior year tax returns.
A family should contact the Department of Education first and then the college if you have any questions or problems. It is always important to check with your school’s financial aid department to make sure all your information has been received according to the deadlines listed.
The DRT helps to take some of the stress out of the FAFSA process. The Data Retrieval tool is an easy, fast and more accurate way to get your tax information to the financial aid office. This is especially true for entering freshmen. This is a manual process and should be done as soon as possible based on your tax file submission.