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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2928
Experience:  IRS licensed Enrolled Agent and tax instructor
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My tax return transcript I gave to college Aid has our

Customer Question

My tax return transcript I gave to college for Financial Aid has our Adjusted Gross income at 18,000 $ more than what Recomputed Adjusted gross income states on same Tax return Transcript . Gross income ( as your aware I'm sure ) makes a dif on how much aid school gives . Should the college be looking at Recomputed gross income ? I'm assuming that the Recomputed is the correct number ? Please let me know ASAP . It could make a dif in us getting needed aid . I had given the college a stamped copy - ( & I do not believe the Recomputed amount was on stamped copy . ) but Yes it is on Tax Return transcript I gave school today .
Submitted: 11 months ago.
Category: Tax
Expert:  emc011075 replied 11 months ago.

Hi. My name is ***** ***** I will be happy to help you.

According to federal student aid 2016-2017 FAFSA Verification IRS tax return transcript Matrix (the guide used by the student financial office) "recomputed" amounts should be ignored.

https://www.ifap.ed.gov/eannouncements/attachments/032316FAFSAVerification20162017IRSTaxReturnTranscriptMatrixAttach.pdf

The EFC or Expected family contribution (used to determine eligibility) is calculated by adding

- Adjusted gross income, if tax filers, or total wages

- Non-taxable income, contributions to tax-deferred pension and savings plans, IRA deductions, child support, untaxed portions of retirement distributions and other items listed on the financial aid application

Expert:  emc011075 replied 11 months ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

Customer: replied 11 months ago.
Why would the Recomputed amount be ignored ? Isn't the Recomputed the correct amount ? It was Recomputed ( assuming that an error was made initially )
Customer: replied 11 months ago.
Our EFC is approx 9,000 more with adjusted . With Recomputed adjusted it is approx 9000 less . What is Recomputed based on ? I assumed Recomputed is Correct ? If so why should a person be penalized because of error initially ?
Customer: replied 11 months ago.
I cannot afford another 52 for a tel call. I paid 38 dollars and should get info on why Recomputed is ignored . I would appreciate your help .
Expert:  emc011075 replied 11 months ago.

AGI per computer is the final amount as adjusted by the IRS or by your amended returns. The recomputed amount started showing up on 2015 return transcripts and it is not clear if it is just for IRS purposes or how it is exactly calculated. All financial aid instructions state to ignore the recomputed amount.

Expert:  emc011075 replied 11 months ago.

Here's a blog from a financial aid office: https://nelnetblog.com/2016/03/31/ask-a-fed-perkins-verification-and-more/

"In addition, many schools have asked me questions about the “recomputed” line items appearing on 2015 tax transcripts and how those items should be evaluated. Please note that in the 3/23/16 EA we specifically state that any line item on the IRS Tax Return Transcripts that say “RECOMPUTED <tax return item name> PER COMPUTER” should be ignored for purposes of verification."

Expert:  emc011075 replied 11 months ago.

And here's the respond from the federal student aid website (office of US department of education):

https://ifap.ed.gov/eannouncements/032316FAFSAVerification20162017IRSTaxReturnTranscriptMatrix.html

"Note that beginning with 2015 a line may appear on some IRS Tax Return Transcripts that says “RECOMPUTED <tax return item name> PER COMPUTER”. The amount on this line should be ignored for purposes of verification."

Department of education had guidelines and those guidelines are: ignore the "recomputed" amount.

Expert:  emc011075 replied 11 months ago.

I am looking at my company guidelines for amending a tax return using transcripts and it also states not to use "recomputed" or "verified" amounts. "Per computer" is what we should be using. Which means "recomputed" is not the final amount.

Do you have any questions? Is there anything else I can help you with today?

Customer: replied 11 months ago.
If the Recomputed adjusted gross income is less than it is to the schools benifit to ignore it . They should not be able to make a decision to ignore Recomputed unless they have 100 facts on what correct number is ! Someone must have the answer at the IRS . Does IRS know that schools are ignoring Recomputed ? Until I know 100 percent what correct no is & know 100 percent from IRS that schools are allowed to ignore & why I won't give in . Maybe Recomputed is there because it is correct amount & maybe Schools need to know that . How can something be ignored without any facts on what is correct info ?
Expert:  emc011075 replied 11 months ago.

The guidelines had been issued by the US department of education - student financial aid division. It is a government agency so I am pretty sure the IRS - part of the US department of treasury is aware of it.

I can only tell you what the government guidelines are and those guidelines are used by all financial offices. FAFSA is a government program so the the school financial aid office cannot just ignore it and the school cannot choose to ignore the guidelines.

Customer: replied 11 months ago.
There are other Recomputed amounts per computer under Tax& Credit , etc . - on return transcript .
Expert:  emc011075 replied 11 months ago.

It is probably the advance premium tax credit. Did you have an insurance through the marketplace? Which line is it?

Expert:  emc011075 replied 11 months ago.

Any questions? Is there anything else I can help you with today?

You can determine your correct AGI from the transcript. Add lines 23 through 35 and subtract the total from line 22. This will give you your correct AGI. It is your total income (line 22) minis adjustments (23 - 35).

I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.