Why are they asking this information?

Generally, taxpayers file a Schedule 1 to report income or adjustments to income that can't be entered directly on Form 1040. This question is used to help determine if you may be eligible to skip certain questions in the FAFSA form. The answer to this question may be prefilled with "Transferred from the IRS" when using the IRS Data Retrieval Tool (DRT).

How to answer this question / fill out this section

Answer, "No" if you (and if married, your spouse) did not file a Schedule 1.

Answer "No" if you (and if married, your spouse did or will file a Schedule 1 to report only one or more of the following items:

1. Unemployment compensation (line 7)
2. Other income to report an Alaska Permanent Fund dividend (line 8 – may not be a
   negative value)
3. Educator expenses (line 10)
4. IRA deduction (line 19)
5. Student loan interest deduction (line 20)