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Federal Tax Information: What It Is and What You Need to Know

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Federal Tax Information: What It Is and What You Need to Know

One of the biggest changes with the 2024-2025 FAFSA is how Federal Tax Information (FTI) is gathered during the application process. FTI is any tax return or return information received from the Internal Revenue Service and is important for determining income, eligibility, income-driven repayment plan options, and more through the FAFSA process. Starting this year, your Federal Tax Information will be sent directly from the IRS to the Department of Education.

Today, we want to talk about what you need to know about FTI and FAFSA!

Do I have to provide consent for FTI? 

Providing this information is critical to determine your student’s eligibility for aid programs, so yes – you should provide your FTI. During the FAFSA application process, you will provide consent for this information to be used. Anyone who is involved with the application (the applicant, the applicant’s parents, or spouse) will also provide consent to have their FTI retrieved from the IRS. So, rest assured that you have the option to say “yes” or “no”. We recommend you say “yes” and allow the IRS to send that information! 

What exactly are they gathering?

Starting with the new 2024-2025 application, the following information will be gathered from the IRS: tax filing status, adjusted gross income (AGI), number of exemptions, number of dependents, and income earned from work. Additionally, information about your educational credits, untaxed IRS distributions, payments, tax exempt interest, untaxed pension amounts, and profit/loss information will be gathered, too. 

How does the Department of Education/FAFSA gather my FTI?

About ten years ago, the Data Retrieval Tool was created for the FAFSA process. This tool helped applicants import their data from the IRS to their FAFSA application. In the future, a new tool will be used: FUTURE Act Direct Data Exchange (FADDX). This new program simply means that in the future, your information will not be imported. Instead, it will be received directly from the IRS to the Department of Education. 

As you can see, Federal Tax Information is part of the FAFSA application process. The Department of Education has been working diligently to make this all run smoothly for applicants. Updating the process to gather FTI results in fewer errors and protects your information in a more robust way. 

Who We Are

CFAA helps with the financial aid process, from completing the FAFSA and completing the CSS Profile to reviewing the SAR, responding to requests for verification, comparing financial aid offers and understanding student loan options. Schedule a 15 Minute Power Chat to learn more about finding ways to pay for college.





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