2026/27 Taxes

SF Learning Team - 2026

2026/27 Taxes

START

Index

Tax Filling Statuses

01

Foreign Taxes & Exclusions

04

FTI Transfers

02

Tax Documents

05

Manual Tax Entry

03

Resources

06

Tax Filing Statuses

Head of Household

Single

QualifiedWidow(er)

Married Filing Jointly

Married Filing Separately

For more information on Tax Filing Statuses please visit IRS Tax Filing Tool

FTI Transfers

What information imports from the IRS when consent is given?

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On the ISIR listed in the "FTI Information" section on the 26/27 ISIR - we do not have an example ISIR yet

On the ISIR in the "FTI Information" section

Manual Tax Entry

What information would a student be prompted to enter if FTI does not transfer properly?

Top sectionIncludes: Foreign Earned Income Exclusion data

Bottom sectionIncludes: Filed Joint Return with Current Spouse data

Manual Tax Entry

Reasons a student/contributor may be prompted to enter FTI manually on the FAFSA:

• Marital Status has changed since filing their IRS tax return for the applicable year.

• Filed taxes in a U.S. territory (Puerto Rico, Guam, America Samoa, U.S. Virgin Islands, Northern Mariana Islands) a commonwealth or foreign country.

• Indicated on the online FAFSA that they have not yet filed a tax return but plan to.

• Is a victim of IRS Tax-related identity theft.

• Did not provide consent to transfer FTI.

• Identifiers do not match the IRS records (IRS response code 203).

• FA-DDX transfer of FTI was incomplete (IRS response code 206).

• IRS was unable to confirm tax return data (IRS response code 212).

• IRS data unavailable due to an IRS system-related outage when the FAFSA was completed.

• FSA ID has not been verified yet.

Foreign Taxes & Exclusions

Defining the Difference

Foreign Tax Return

Foreign Earned Income Exclusion

U.S. citizens with income from sources outside the United States (foreign income). They must report all such income on their tax return unless it is exempt by law or a tax treaty. They may be able to exclude part or all of their foreign earned income if it meets the exclusion requirements.

U.S. citizens or a resident alien of the United States and lives abroad. They are taxed on their worldwide income. Portions of the income earned while living abroad and used for things such as housing and food could be excluded from being taxed.

Foreign Taxes

Foreign Tax Return

If a student/contributor indicates on their FAFSA that they filed a Non-U.S. Tax return but NOT a U.S. tax return...First contact the student/contributor to confirm if this is correct. Depending on what they confirm will determine your next steps

Foreign Taxes

Foreign Tax Return

If a student/contributor confirms "Yes" they did file a Non-U.S. Tax Return:

Step 2:

Step 3:

Step 4:

Confirm with student if they know what their US Tax Filing status would be. If not: direct them to the IRS Tax Filing Status Wizard. If yes, or once confirmed: Send a SS to student using Income Conflict #2 Prompts

Determine if the student exceeded in US filing threshold and was required to file a US Tax Return for the base year.

Request a copy of the signed Foreign Tax Return.

Foreign Taxes

Foreign Tax Return

If a student/contributor confirms "Yes" they did file a Non-U.S. Tax Return:

Step 4:

If yes:

If no:

Then submit an FA - 26-27 ISIR Corrections Task to the ISIR Review, ISIR Review queue stating that foreign tax documents are on file. Wait for new ISIR to be on file before packaging.

The student/contributor must file a US tax return. You cannot proceed with this file until a physically signed copy of the new IRS 1040 is on file. (An updated SS will also need to be sent to show the student DID file a US Tax Return.)

Determine if the student exceeded in US filing threshold and was required to file a US Tax Return for the base year.

Tax Filing Thresholds

Individuals are generally required to file income tax returns if their income exceeds certain thresholds set by the U.S. government.

• These amounts typically change each year, and the requirements vary depending on filing status, income, and age.

EXAMPLES

• Most single individuals under 65 must file taxes if their gross income exceeds $14,600.

• For married couples filing jointly, the threshold is $29,200.

Find this threshold chart and many more resources in the 26/27 VT & Taxes Workbook

Tax Documents

Form 1040

Page 1

Page 2

It is important to always review all tax documents uploaded to a student's file!

Tax Documents

Schedules

Schedules are additional tax forms and not all tax filers must file them.

Taxes should always be reviewed to see whether the tax filer should have filed a Schedule (1, 2, or 3) along with the Form 1040. If so, the advisor will need to collect copies of the filed schedules.

Tax Documents

Form W2

A tax document that employers must submit to their employees each year, which summarizes the wages paid and taxes withheld for the employee during that year.

What to Review on the W2

• Confirm the Tax Year

• Confirm the name on the form matches

• Compare Wages to the Income Earned From Work (IEFW) listed on their Verification Worksheet (VWS) if selected for Verification.

• If a W2 is needed for Verification, confirm the company name and wages amount are identical to what is listed on the VWS.

2024

Tax Documents

Tax Transcripts

Tax Transcripts include all information listed on the student's tax return.

• Confirm tax year and name(s) on form.
• Confirm tax filing status.
• Confirm that all pages have been uploaded. 5-6 pages.
• Review AGI under the Adjustments to Income section.
• Check for a Schedule 1 - Asset Value Worksheet would be required if so

Tax Documents

Verification of Non-Filing Form (VONF)

The VONF (Verification of Non-Filing) is another tax document that may be required for students to complete.

• Only required in cases of foreign income earned (independent students/contributors only) and if they are not required to file a foreign tax return.

• The VONF is never required for a Dependent Student!

How we become aware of this information to confirm if a VONF is required:

• If the student is selected for Verification

• Disclosed they earned income in a foreign country

• Turned in a foreign wage transcript

Amended Taxes

1040X - Reviewing the Document

What to confirm on the 1040X:

• The name on the form and the tax year.

• Their Tax Filing Status matches Form 1040 (unless amending to change the TFS)

• Review columns A, B, and C.

• Line A = Match original amounts on Form 1040.

• Line B = Reflects any dollar amount changes (if any) as a result of amending (will be $0 if no changes)

• Line C = Reflects the difference of what is being changed (will be the same as Line A if no changes)

Amended Taxes

1040X - Reviewing the Document

Example:

• Sandra made a mistake on her taxes (Form 1040).

• Column A on line 1 shows 56,867.

• Column B on line 1 shows 45,867.
• This amount is in parentheses, meaning it is being subtracted from the originally filed amount.

Amended Taxes

1040X - Reviewing the Document

Example:

• Sandra made a mistake on her taxes (Form 1040).

• Column A on line 1 shows 56,867.

• Column B on line 1 shows 45,867.
• This amount is in parentheses, meaning it is being subtracted from the originally filed amount.

• Column C on line 1 shows the difference between column A and B = 11,000.

• If the amounts are not being amended, then Column C will reflect the same amount as Column A, and no difference shown in column B.

Resources

SS Prompt Guide

MS vs TFS Flowchart

VT & Taxes Handbook

2026/27 Ultimate FAFSA Workbook

Crossover Packaging Flowchart

Crossover One-Pager

Packaging Status Guide

2026/27 FPP Page

2026 FSA Handbook

Questions?

Head of Household

For unmarried taxpayers who support and house a qualifying person.

Qualifying Widow(er)

Allows a surviving spouse to use the married filing jointly tax rates on an individual return.

Single

Status is for unmarried people who do not qualify for another filing status.

Married Filing Jointly

For married couples, allowing them to file their income together on a joint tax return.

Married Filing Separately

Married couples who choose to record their respective incomes, exemptions, and deductions on separate tax returns.