From the desk of...

Robert Weinerman, Director of Training

On February 13, 2026, Federal Student Aid (FSA) released a first draft of the 2027‑2028 Free Application for Federal Student Aid (FAFSA), inviting interested parties to review and comment during a sixty-day period that ended on April 14, 2026. The draft includes the introduction of two new data elements, which will combine the Adjusted Gross Income (AGI) and Income Tax Paid of contributors who are “dual tax filers” – people who file both a federal tax return and a territory tax return. This change, if implemented, will almost certainly change the V1 Verification experience of applicants who, or whose parents or spouse, live in the United States territories.

Note that to support this change, FSA changed the language in the FAFSA to describe a tax return filed with the IRS as “federal tax return,” which it defines as a Form 1040 or Form 1040‑NR. This is a helpful change, given that all the territories except Puerto Rico and American Samoa include the “1040” text in the title of the tax form their resident’s file, and people in those territories might, therefore, answer that they did or will file a Form 1040 or 1040‑NR. Puerto Rico has its own tax Form that is distinct from Form 1040 (Forma 482.0). American Samoa uses Form 390. This is a form modelled after the 2017 Form 1040 (which was completely restructured starting with the 2018 tax year) and is published as a dynamic Excel spreadsheet. If you are a tax wonk like I am, you should check it out here. It’s very cool.

This change is clearly designed to address a well-known issue with the application data received from dual tax filers when the Future Act Direct Data Exchange (FA‑DDX) matches their IRS record to their FAFSA contributor record. Federal Student Aid (FSA) first brought this issue to the attention of financial aid administrators (FAAs) in GEN-23-118, Puerto Rico and other U.S. Territories Dual Tax Filers Reporting Income and Tax Information on the 2024-25 FAFSA. Basically, if a contributor filed both a federal tax return and a territory tax return, and if the FA‑DDX imports the Form 1040 tax return into the FAFSA, only the data on the Form 1040 will be available to FAAs as they determine the applicant’s eligibility for financial aid. Similarly, if a contributor fills out the paper FAFSA and states that they filed or will file a Form 1040 (now “federal tax return”)  they are permitted to skip the questions asked of contributors who did and will not file a Form 1040, where they could report that they did or will file a territory tax return. In both cases (FA‑DDX and manual reporting of tax data), the presence of Form 1040 means the income and tax information from the territory tax return is not included in the FAFSA income and tax data...