Income is "significantly less than the amount reported last year."

<p>My dad was unemployed last year, and as a result our family's income on this year's taxes is was only about half of what we reported last year. When I try to enter their AGI into FAFSA, I get the error message "The parents' adjusted gross income or income earned from work is significantly less than the amount reported last year." Now this is entirely true, but FAFSA treats it as an error and I cannot seem to continue until it is fixed. Has anyone ever encountered this problem?</p>

<p>Yes, we got that too with my son's fafsa. I retired during the year. Seems like it ought to be a warning maybe, but not referred to as an error. I did get past it as I recall by just clicking through somehow. Is there an ignore option? Can't remember specifically what we did though. The FAFSA was flagged for verification, probably because of that.</p>

<p>Thanks, that actually worked somehow. For the first dozen or so times I tried to submit, it just wouldn't go through at all and came back with the same error message, but after reading your post I decided to keep trying anyway and eventually it went through even though I didn't change anything. Very strange.</p>

<p>Yeah, it's all good!
I have had the same issue the other day -it was saying that the income tax paid was much larger than the last year (which is logical, given that my parents' income didn't change but they didn't claim me this year). I just clicked "Check for Errors" and then it worked fine.
I think that FAFSA designers should make it a "warning", not an "error" as the former is very confusing.</p>

<p>Out of curiosity, did any of you who had this issue get selected for verification? The way to tell is if you have an * next to your EFC on your SAR (which you will receive after your FAFSA is processed).</p>

<p>My post indicated we were selected for verification. We weren't selected my son's first two years but we only qualified for the unsub loans those years.</p>

<p>Anyone else? I like to try to figure out what prompts verification, and I am pretty sure this will ... but it would have to be more than just annoyingdad's that was selected for it to be a pretty good bet this will result in verification (not that being selected is that big a deal).</p>

<p>The next question is, since verification for 2012-13 is different than in the past, I would be curious to know what the schools request from you.</p>

<p>My son's school requested a verification worksheet and tax transcripts for my son and I. I emailed them asking if the auto transfer from the IRS would satisfy the tax transcript requirement and they replied it would.</p>

<p>So now, based on a previous post from you kelsmom, I'm bracing for my rollover not to be handled properly in the transfer when I do it. If it's put in the other untaxed income bucket it will probably at least quadruple our EFC. So I'll have to contact the school about that. Do you know if a tax transcript will show a rollover properly? If not, I have the 1099R and bank records they'll likely want.</p>

<p>The rollover IS an issue --- I would send a copy of the signed tax return to the school, with a note indicating that, as they can see, the distribution is due to a rollover (I am assuming that it is clearly marked on your 1040). That is one weakness of the direct transfer ... it does not pick up the rollover. I don't think a transcript shows it, but you can call the IRS help line to ask (they are very helpful).</p>

<p>Or you can send the other documents - but they will probably take the return as documentation.</p>

<p>For FAFSA year 2008-2009 we also saw the warning that our taxes paid were "significantly higher than the previous year" and all it took to complete the FAFSA was a click-through. That was the year that my husband and I both rolled non-Roth IRAs into Roth IRAs. I do not recall any way of explaining that, and we were not ever selected for verification. Of course S1 only qualified for unsubsidized loans.</p>

<p>Before last year, it seemed like the higher EFC FAFSAs didn't get flagged all that often. Last year, though, I was surprised how many high EFC FAFSAs I had to verify -which was such a waste of time, when all they got were unsub loans. It was odd. Selection for verification is random-but-not-really ... certain things will trigger it, and those things seem to change from time to time.</p>

<p>
[quote]
Out of curiosity, did any of you who had this issue get selected for verification? The way to tell is if you have an * next to your EFC on your SAR (which you will receive after your FAFSA is processed).

[/quote]
Yes, we also got the "significantly less" message and were told we were selected for verification by FAFSA. </p>

<p>We have not heard from the university as to whether they will actually choose us or not but I'm planning to use the IRS data retrieval after I file our returns so hopefully that will satisfy them.</p>

<p>Kelsmom,</p>

<p>We got tagged for verification two years in a row when my husband was out of work and I had two jobs - one self-employed and one part-time. I am not sure which of these triggered it. </p>

<p>I am hoping it doesn't happen again this year.</p>

<p>Fwiw- I've had the * every year I've submitted a FAFSA (on year 4). Never been selected for verification.</p>

<p>Lucky you, romani! :)</p>

<p>Actually, romani's school is part of a special program that chooses its own FAFSAs to verify based on criteria that fits their population. Only a few schools are part of the program.</p>

<p>Whoops, sorry kels. I didn't know that.</p>

<p>No need to apologize!:) I thought it was an interesting fact that may help explain why you have never been selected even though you are a low income student. Your school has figured out certain things that it looks for on the FAFSA and selects for verification based on those attributes.</p>

<p>Both my kids received their SARs yesterday and both had asterisks. (First time students for 2012-13 at different schools) How likely is it that we will actually have to go through the verification process? </p>

<p>Since our taxes were just completed last week (in time for both schools' FAFSA deadlines of Feb. 15) I could not use the IRS retrieval link. I am planning on requesting tax transcripts to have if needed, but wanted to wait a little longer to request since our returns were just accepted by the IRS on Feb. 8.</p>