First Edits for School Year 2003-04 - SFA Financial Aid Help



First Edits for School Year 2015-16

Tax Return Transcript Used: 2014

Pre-processing Check:

1. If you can’t identify the student for whom the tax return transcript has been submitted, set aside for return.

2. Is the tax return transcript legible? Can you read all required information clearly? If not, set aside for return.

3. Check the Verification remarks.

Did we request the document? If not, give to a coordinator.

Are there comments to bring the documents to a specific person? If so, give to the appropriate person.

Check for documents that must be processed together (e.g., STAX and SXCL or SNTX OR PTAX and PXCL or PNTX). Have all items been received? Check the Tracking screen.

4. Check the Verification Screen. Has PTAX or STAX information been verified already? If yes, do the numbers on the tax return coversheet match the information shown in the VERD column on Verification? If so, the tax return transcript is most likely a duplicate. Attach a Post-It note with the word “duplicate” and place in the Duplicates tray in Heather’s office.

5. Check the year for which the tax return transcript and W-2s were issued. Is it for the correct year? If not, set aside for return.

6. Does the filing status on the tax return transcript match the marital status on the Verification Screen?

• If the tax return transcript is married filing jointly but the marital status on Verification is divorced, unmarried, widowed or separated, give the tax return transcript to a coordinator.

• If the marital status on Verification is married and one or both parents filed as head of household, give the tax return transcript(s) to a coordinator. If a married student or his/her spouse filed as head of household, give the tax return transcript to a coordinator.

• If the marital status on Verification is married and you only have a tax return transcript for one person, set the document aside to be returned.

7. If the adjusted gross income (PAGI/SAGI) is negative and the tax paid (PTAX/STAX) is greater than zero, bring the tax return transcript to a coordinator.

8. Is the tax return transcript complete?

• Are all pages of the tax return transcript present? If not, set aside to be returned.

• Do the W-2s/1099s equal the amount of the wages reported on the wage line? If not, set aside to be returned.

Note: if no income reported on wage line, no W-2s are required.

• If the tax return is a 1040X (amended), is a complete original return also included? If not, set aside for return.

• Is the tax return estimated? If so, is an IRS form granting extension present (Form 4868)? If not, set aside for return.

Automatic extensions deadline is October 15.

If you have only a written statement from the parent indicating they haven’t filed yet but the parent states estimated income information, see a coordinator.

• Is the tax filer’s deduction more than the standard amount allowed?

If form 1040A used, box 23a or 23b must be checked for a larger deduction.

If form 1040 used, see whether boxes 39a or 39b are checked.

If none of the boxes (39a or 39b) are checked, then Schedule A was completed. If the adjusted gross income (AGI) is less than $50,000, then we require a copy of the Schedule A.

• For 1040 forms only:

If business income or loss is reported on line 12, is/are Schedule(s) C or C-EZ present? If not, set aside for return. If schedule C is present, does the net amount from Schedule C (or C-EZ) match what is reported on line 12? Be sure to check for multiple schedules; it is possible for the tax filer to have more than one Schedule C (or C-EZ). If the total business profits/losses do not equal the amount reported on line 12, set aside for return.

• For 1040 forms only:

If farm income or loss is reported on line 18, is Schedule F present? If not, set aside to be returned. If Schedule F is present, does the net amount listed on the form match line 18 of the 1040? Be sure to check for multiple schedules; it is possible for the tax filer to have more than one Schedule F. If the total profits/losses do not equal the amount reported on line 18, set aside for return.

• Did the tax filer report Unemployment Compensation on the tax return transcript? If so, check for copies of form 1099-G. If not present, set aside for return.

Unemployment Compensation is reported on:

Line 19 of the 1040

Line 13 of the 1040A

Line 3 of the 1040EZ

Processing:

• Print all numbers neatly.

• Do not use $ signs, commas, decimals, or cents.

• Round cents up to next dollar if $0.50 or above; round down for $0.49 and below.

For example: if parent adjusted gross income is $25,000.50, then write 25001 on the Verification form.

PTFS or STFS:

Parent or Student Tax Filing Status – 3 positions:

1st Position: Did the parent (student) file a tax return?

1 = Yes, have already filed.

2 = Will file but hasn’t yet. (Estimated)

Processed by financial aid coordinators only. Students do not process.

3 = Will not file.

This is only used with Certification of Nonfiler Status forms (PNFS or SNFS). The forms themselves should be prefilled with “3” in the first position. The 2nd and 3rd positions will be left blank.

2nd Position: What type of tax return was filed?

1 = 1040

2 = 1040A or 1040EZ

3 = Foreign Tax Return

4 = Puerto Rico & US Territories

All of the tax returns transcripts verified by student workers will be coded either 1 or 2 in the 2nd position. Coordinators process tax returns for territories or foreign countries.

3rd Position: What is the Tax Return Filing Status?

1 = Single

2 = MFJ

3 = MFS

4 = HOH

5 = W

6 = DK/Don’t Know

4th Position: Is the parent or student qualified for a Simple Need Analysis?

1 = Yes

2 = No

If the tax return transcript you are reviewing is a 1040, refer to the separate guide sheet Determining Need Analysis Eligibility for this step.

To be eligible for the simplified analysis, a person must be eligible to file a 1040A or 1040EZ (“short forms”) and have an AGI of less than $50,000.*

If the AGI is $50,000 or greater, the file would be automatically coded as 2 in the 4th position, regardless of the type of form used.

*For tax filing purposes, the income threshold to file a 1040A or 1040EZ is $100,000. However, the AGI limit for a simplified need analysis is $50,000.

Some common items found on a 1040 that would prevent someone from filing a “short form” include:

• Reported alimony on line 11.

• Reported business income (or loss) on line 12 (Schedule C).

• Reported capital loss on line 13, or used Schedule D to report a capital gain on line 13.

• Reported rental real estate, royalties, etc. on line 17 (Schedule E).

• Reported farm income (or loss) on line 18 (Schedule F).

• Other income that could not be reported elsewhere (e.g., Net Operating Loss (NOL), etc. on line 21).

• Income adjustments on lines 24 through 30, 31a, 35.

• Itemized deductions (used Schedule A to claim an amount larger than the IRS standard deduction).

PAGI or SAGI:

1040 = line 37 1040A = line 21 1040EZ = line 4

If the Adjusted Gross Income (AGI) is a negative number, it will be set in parentheses, carats or preceded by a minus sign. The AGI is the only Verification item that we record as a negative. When the AGI is negative, you must be sure to write it as a six-character number on the Verification document [STAX (34), PTAX (36)]. The first character is always the minus sign.

If the negative AGI on the tax form has fewer than five numbers (-1 through -9.999), use zeroes as placeholders to make it six characters long. If the adjusted gross income has more than six numbers (less than -100,000), you must record the AGI as -$99,999.

For example:

Tax return’s adjusted gross income: Record on Verification form as:

($32,451) or -$32,451 -32451

($9,547) or -$9,547 -09547

($124,569) or -$124,569 -99999

PTAX or STAX:

1040 = line 56 1040A = line 39 1040EZ = line 10

PAR 1 & PAR 2 or STWG & SPWG:

Wages found on W-2s

Refer to form W-2, box 1 for wages. Use names and social security numbers to determine to whom the wages belong.

Wages found on Schedule C/C-EZ and Schedule F

If the tax return is IRS form 1040, look for business and farm income. These sources are also considered wages. Business income is reported on line 12 and farm income is reported on line 18. Refer to the corresponding schedules to determine the amount of the wage and to whom it is attributed.

Business income is calculated using Schedule C or Schedule C-EZ.

On Schedule C, refer to line 31 for the wage amount.

On Schedule C-EZ, refer to line 3 for the wage amount.

Farm income is calculated using Schedule F. Refer to line 36 of the schedule for the wage amount.

Wages from Schedule C, C-EZ or F are assigned to the individual listed in the upper left portion of the form. If more than one person is listed on the schedule, divide the net income equally between the parties listed.

Keep in mind these schedules may result in a net loss (negative number). For tax purposes, all Schedules C/C-EZ must add/subtract to result in the amount reported on line 12. All Schedules F must add/subtract to match the amount reported on line 18.

For financial aid purposes, we count as wages all positive schedules as a wage. All negative schedules are treated as zero (0).

We also record the amount on Schedule K-1 (Form 1065), Box 14 as an amount to be included in wages (Self-employment net earnings (loss). Box 14 of this schedule can include 3 types of income listed as A, B, and/or C. Normally only code A figures into calculating self-employment tax on Schedule SE.

Wage Discrepancy

Situations where wages reported on the tax form that are not equal to W-2s.

• The wages reported on the tax return transcript may be more than the total of W-2s if the student included taxable portions of scholarships/grants. If scholarships were included, the student should indicate the scholarship amount and “SCH” next to the wage information of the tax form. If this accounts for the wage discrepancy, the taxes do not need to be returned for additional W-2s. The scholarship amount is not included as STWG/SPWG; it does not get FICA credit. The taxed scholarship amount should be counted as excluded income (SGSA).

• The wages reported on the tax return transcript may be more than the total of W-2s if the parent/student earned wages as a household employee who did not receive a W-2 because the employer paid less than $1,700 in 2014. The parent/student should report the amount received and “HSH” next to the wages information of the tax return transcript. The HSH wages do not get FICA credit; they are not included in PAR 1/PAR 2/STWG/SPWG.

• UNDER-REPORTING W-2s: If wages are less than $300 (for student), we can make a personal judgment to accept. For STWG, use amount reported on tax return transcript so that student receives full FICA credit [to their benefit].

• OVER-REPORTING W-2s: If total from W-2s is greater than the wages reported on tax return transcript, then the excess amount is reported as Other Untaxed Income (POUI or SOUI). They earned the amount, but did not pay taxes on it. Use the total of all W-2s for PAR 1/PAR 2/STWG/SPWG to give them the benefit of FICA credit.

Additional Financial Information (formerly known as Excluded Income)

Check Tracking. If PXCL (82) is requested, cross out the appropriate box of the parent income coversheet. If SXCL (83) is requested, cross out the appropriate field of the student income coversheet. Use the separate Verification document (82 or 83) to record the excluded income.

Types of excluded income:

• PEDC/SEDC Education credit (found on the tax return transcript).

1040 = line 50 1040A = line 33

• PCSP/SCSP Child Support Paid

Not found on the tax return transcript. Reported by parent/student.

Do not include support for children reported in the household size.

• PNBE/SNBE Earnings from need-based employment.

The most common need-based aid verified is Federal Work-Study (FWS) and Florida Work Experience Program (FWEP) wages. For W-2s issued by the University of Florida, verify work-study or Work Experience Program earned by reviewing Award or History screens. If earned at another school, the student must write “FWS” or “FWEP,” respectively, on the W-2. Work-Study & FWEP is counted as both wages & excluded income. (Can be found on Award File Aid ID # 0329).

• PGSA/SGSA Grant and scholarship aid reported in the adjusted gross income.

Only scholarships and grants that were reported as income on the tax return are verified as PGSA/SGSA. Grants and scholarships not included in the AGI cannot be counted.

• PCBP/SCBP Combat pay included in the adjusted gross income.

Only portions of combat pay that were included in the adjusted gross income should be verified as PCBP/SCBP.

Just because combat pay is shown on the W-2 form, it was not necessarily included in the adjusted gross income. If you have trouble determining whether combat pay was reported on the tax return transcript, please see a coordinator.

• PCOP/SCOP Earnings from work under a cooperative education program offered by a college. (Award File Aid ID # 0329).

Students and parents cannot exclude more money than they made. If a tax return was filed, the total of all items reported under Additional Financial Information can be no more than one dollar ($1) less than the adjusted gross income (PAGI/SAGI). If a Certification of Non-filer Status is received, the total of Additional Financial Information must be one dollar ($1) less than all wages combined.

Assistantships and Fellowships

Since it is difficult for us to determine whether assistantships and fellowships are need-based or funded by grants and scholarships, we generally accept the amount reported to us by graduate students. You will most commonly find these reported on the Additional Financial Information form (SXCL) under need-based employment (SNBE) or grants/scholarships (SGSA).

Feel free to see a coordinator with any questions.

Untaxed Income

Check Tracking. If PNTX (80) opt doc is present, cross out the appropriate box on the parent income coversheet. If SNTX (81) opt doc is present, cross out the appropriate portion of the student income coversheet. Use the additional Verification document (80 or 81) to record any untaxed income.

• PPEN/SPEN Payments to tax-deferred pension and savings plan.

Found on W-2s: box 12a through 12d. Codes: D, E, F, G, H & S.

• PIRA/SIRA IRA deductions and payments to self-employed SEP, SIMPLE, Keogh plans.

Found on tax return transcript: 1040 = lines 25 + 28 + 32 1040A = line 17

• PCSR/SCSR* Child support received.

Not on tax return transcript, reported by parent or student.

• PINI/SINI Tax exempt interest.

Found on tax return transcript: 1040 = line 8b 1040A = line 8b

• PIRD/SIRD Untaxed portions of IRA distributions.

1040 – If line 15a is greater than 15b, the difference between the two is considered untaxed income. 1040: (15a – 15b = PIRD/SIRD)

1040A – If line 11a is greater than 11b, the difference between the two is considered untaxed income. 1040A: (11a – 11b = PIRD/SIRD)

If negative, record as zero. Do not include IRA distributions labeled ROLLOVER. Untaxed portions of rollovers are not considered untaxed income. If portions of Rollovers are included in the adjusted gross income, or if the word “ ROTH” is present on the tax return, see a coordinator.

• PUTP/SUTP Untaxed portions of pensions.

1040 – If line 16a is greater than 16b, the difference between the two is considered untaxed income. 1040: (16a – 16b = PUTP/SUTP)

1040A – If line 12a is greater than 12b, the difference between the two is considered untaxed income. 1040A: (12a – 12b = PUTP/SUTP)

If negative, record as zero. Do not include pensions labeled ROLLOVER. Untaxed portions of rollovers are not considered untaxed income. If portions of Rollovers are included in the adjusted gross income, or if the word “ ROTH” is present on the tax return, see a coordinator.

• PMCA/SMCA Housing, food and other living allowances paid to military or clergy.

Such benefits are reported in box 14 of the W-2 form, but must be clearly labeled as housing or food allowances in order to verify as PMCA or SMCA.

Do not include the value of on-base military housing or the value of a basic military allowance for housing.

Basic allowances for housing (BAH) reported on the W-2 are not counted. However, basic allowances for subsistence (BAS) reported on the W-2 are included as PMCA/SMCA.

• PVNB/SVNB* Veterans’ non-educational benefits.

Includes Disability, Death Pension, or Dependency & Indemnity Compensations (DIC) and/or VA Educational Work-Study allowances.

• POUI/SOUI* Other untaxed income or benefits not reported elsewhere.

Includes worker’s compensation, disability. Also include the untaxed portion of HSA from IRS for 1040-line 25.

Don’t include student aid, earned income credit, child tax credit, welfare payments, Do not include student aid, earned income credit, additional child tax credit, welfare payments, Social Security benefits, Workforce Investment Act educational benefits, combat pay, benefits from flexible spending arrangements, foreign income exclusion, credit for federal tax on special fuels.

• SONI* Money received, or paid on the student’s behalf (e.g., bills).

*These items cannot be found on a tax return transcript. They will either be reported on the financial aid application (as seen on the Verification Screen) or on the Untaxed Income and Benefits Statements (PNTX or SNTX).

Untaxed income assumptions – Use of Comment 35

For some untaxed benefits, you will record the amount found on the tax return transcript or W-2s, regardless of what is reported on the FAFSA [found on the Verification Screen]. Specifically, these items are: PPEN/SPEN, PIRA/SIRA, PINI/SINI, PIRD/SIRD, PUTP/SUTP.

However, there are many items that cannot be verified using tax return transcripts and W-2s. These items are: PCSR/SCSR, PMCA/SMCA, PVNB/SVNB, POUI/SOUI, and SONI. If amounts are for these benefits are reported on the FAFSA and we have not requested separate Untaxed Income documents [80 for parents, 81 for students], we must make the assumption that those amounts are correct. In such instances, write the letter X in the corresponding untaxed income field. In the RMK field below, write “C-35.” This will instruct the person in data entry to include the following remark on the Verification Screen:

“UNTX reported amount > documented, assumed correct.”

Pre-Processing Parent Non-Filer Statements:

If the parent submits a Certification of Non-filer Status (PNFS), check the previous year’s Verification information. Did the parent file a tax return last year? If so, give the PNFS to a coordinator.

For any Non-filer Statement (PNFS or SNFS), check how much income is reported. If the gross income is more than the minimum amount required to file (below), give the Non-filer form to a coordinator.

Poverty Guidelines for Tax Year 2014

|2014 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES |

|AND THE DISTRICT OF COLUMBIA |

|Persons in family/household |Poverty guideline |

|For families/households with more than 8 persons, add $4,060 for each |

|additional person. |

|1 |$11,670 |

|2 |15,730 |

|3 |19,790 |

|4 |23,850 |

|5 |27,910 |

|6 |31,970 |

|7 |36,030 |

|8 |40,090 |

|2014 POVERTY GUIDELINES FOR ALASKA |

|Persons in family/household |Poverty guideline |

|For families/households with more than 8 persons, add $5,080 for each |

|additional person. |

|1 |$14,580 |

|2 |19,660 |

|3 |24,740 |

|4 |29,820 |

|5 |34,900 |

|6 |39,980 |

|7 |45,060 |

|8 |50,140 |

 

|2014 POVERTY GUIDELINES FOR HAWAII |

|Persons in family/household |Poverty guideline |

|For families/households with more than 8 persons, add $4,670 for each |

|additional person. |

Table 1-1. 2014 Filing Requirements for Most Taxpayers

|IF your filing status|AND at the end of 2013 you   |THEN file a return if   |

|is... |were...* |your gross income   |

| | |was at least...** |

|single |under 65 |$10,150 |  |

|  |65 or older |$11,700 |  |

|married filing |under 65 (both spouses) |$20,300 |  |

|jointly*** | | | |

|  |65 or older (one spouse) |$21,500 |  |

|  |65 or older (both spouses) |$22,700 |  |

|married filing |any age |$3,950 |  |

|separately | | | |

|head of household |under 65 |$13,050 |  |

|  |65 or older |$14,600 |  |

|qualifying widow(er) |under 65 |$16,350 |  |

|with dependent child | | | |

| |65 or older |$17,550 |  |

|* |If you were born on January 1, 1950, you are considered to be age 65 at the end of 2014. |

|** |Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, |

| |including any income from sources outside the United States or from the sale of your main home (even if you can exclude part|

| |or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived|

| |with your spouse at any time during 2014 or (b) one-half of your social security benefits plus your other gross income and |

| |any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the |

| |Instructions for Form 1040 or 1040A or Publication 915 to figure the taxable part of social security benefits you must |

| |include in gross income. Gross income includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from|

| |a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, do |

| |not reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9. |

|*** |If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least|

| |$3,900, you must file a return regardless of your age. |

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