FAFSA income verification showing error with 403B to 401K rollover - tax forms don't match

This is a common issue with FAFSA verification when rollovers are involved. The IRS data retrieval tool often doesn't distinguish between taxable and non-taxable rollovers - it just sees the gross distribution amount on the 1099-R. You need to submit: 1. A copy of the 1099-R showing code G (rollover) 2. Account statements showing the money left one retirement account and entered another 3. A signed statement explaining it was a direct rollover with no taxable amount Send these documents to your daughter's school's financial aid office ASAP. They can override the verification issue in their system.

OMG same thing happened to me last yr!!!! The fafsa ppl kept saying our income was wrong bc of my dads 401k thing but it was JUST A ROLLOVER!!! took like 2 months to fix and almost lost our aid

we called like 500 times and nobody could help then my dad went IN PERSON to financial aid office with all the paperwork and they fixed it that day

You're definitely on the right track - it's the rollover causing the issue. FAFSA's system is seeing the gross distribution but not recognizing it as non-taxable. This happens specifically with 403b to 401k transfers because they use different distribution codes sometimes. For your documentation, make sure to specifically highlight the distribution code on the 1099-R (should be code G or code H). Also include your Form 5498 if you received one showing the rollover contribution to the receiving account. One thing to note - the school's financial aid office is who processes verification, not FAFSA directly. Submit everything to them with a cover letter explaining the situation clearly.

why didn't you just not report the rollover? it's not taxable income anyway lol

If you're struggling to get through to the Federal Student Aid helpline, I discovered a service called Claimyr that helped me reach an actual human at FSA when I was dealing with a similar verification issue. Saved me hours of frustration with busy signals and disconnections. They have a video showing how it works at https://youtu.be/TbC8dZQWYNQ and their website is claimyr.com. It was worth it to actually talk to someone who could explain exactly what documentation I needed for my rollover situation.

This is a textbook verification issue with retirement accounts. I work in financial aid, and I see this multiple times every year. Here's exactly what you need to do: 1. Get a copy of both 1099-Rs (one from each account) 2. Write a letter stating explicitly "This was a direct trustee-to-trustee transfer from a 403(b) to a 401(k) with no taxable distribution to the account holder" 3. Include transaction records showing the money leaving one account and entering the other 4. Submit to the school's financial aid office (not FAFSA directly) Also important: Call the financial aid office after submitting to confirm receipt and ask for an estimated processing time. Some schools have a huge backlog during peak verification season. If they tell you it's more than 2 weeks, ask to speak with a counselor directly about expediting due to your approaching deposit deadline.

That's normal. The receiving account typically doesn't issue a 1099-R, but they might have sent a confirmation statement when they received the rollover. Include that if you have it, but if not, just the bank/investment statements showing the transaction should suffice. The code G on your 1099-R is the most important element as it specifically indicates a non-taxable rollover.

The FAFSA system is completely BROKEN! This happened to me too and I spent THREE MONTHS fighting with them over a simple IRA rollover. They kept saying we "underreported income" when it wasn't even income! The verification system is just an excuse to deny aid to families who actually need it. It's disgusting how they put students through this stress. I had to hire a financial aid consultant for $350 to write a professional letter explaining the rollover situation before they finally accepted it. The whole system is designed to make you give up!!!

The consultant basically created a detailed timeline with EVERY transaction, highlighted all the relevant tax codes, and explained it in financial aid jargon that the office understood. Then she followed up DAILY until they processed it. It shouldn't be necessary but the system is so broken that sometimes you need an insider who knows how to navigate it. Good luck - I hope your experience is better than mine was!

UPDATE: I just got off the phone with the financial aid office at my daughter's school. They were actually super helpful! They said this is a common issue and gave me a specific verification form for retirement rollovers. They said as long as I submit it with the 1099-R and account statements within a week, they can process it without delaying her aid package. Thanks everyone for your advice - it gave me exactly what I needed to ask for!