The tax year used on the FAFSA is changing as is the time when the FAFSA will be available for completion.
Applying for aid for 2017-18 will mark significant changes for the FAFSA. Be sure you understand how the changes affect you – particularly if you are a returning student.
Tax Year for the FAFSA
Beginning with the 2017-18 cycle, the FAFSA will collect income information from the tax year one year earlier than has been used in the past. So for the 2017-18 FAFSA, students and families will provide income information from the 2015 tax year rather than the 2016 tax year.
The FAFSA will no longer ask you to report prior year income. Instead, you will be using prior prior year information sometimes referred to as PPY.
Using an earlier tax year for determining eligibility for financial aid will make it significantly simpler for families to complete their FAFSA, because they will be using information from tax records that had been completed many months earlier.
Moreover, most aid applicants and their parents, when required, will be able to use the FAFSA/IRS Data Retrieval Tool (DRT) to automatically view and transfer required tax return information directly from the IRS onto their FAFSA. Using the DRT not only increases the accuracy of information used to determine aid eligibility but also eliminates the burden for many students and parents of providing tax return transcripts for verification of the FAFSA income information.