Tax Transcript

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  • #67970
    avant219
    Participant

    My wife is going through the NACA program and I am just a household member. She has her second meeting in a week. Our action plan states that NACA needs a copy of my 2018 tax transcript. I just filed my 2018 taxes two months ago. When I check the irs website it does not show anything. It just offers me a verification letter for non filing. But it does offer me a wage and income transcript for 2018. Will this suffice in place of the 2018 tax return transcript?

    #67985
    MovingInMass
    Participant

    I don’t think so. But you can fill out the 4506-T request for transcript and that should work.

    #68003
    TTrumble
    Member

    Hello avant219,

    The letter and income transcript will only show why you don’t have your tax return transcript yet. Also include a Letter of Explanation on why you don’t have it yet. You will still have to have the transcript before the file can be sent to the underwriters for qualification.

    You simply need to keep checking on the IRS website until your transcript is available electronically. Contrary to what MovingInMass wrote, the IRS is not processing paper 4506-T’s right now due to furloughs from the pandemic.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #68010
    johnsoke
    Participant

    Hey . Unfortunately the IRS is not processing any paper returns until further notice due to covid. The info is online. This is very unfortunate as we have no ETA as to when they will do this again and are sitting on thousands of backlogs , so this could delay a lot of people in this position such as yourself.

    #68017
    avant219
    Participant

    I was just looking on the irs website and it says that they are not filing any paper returns until further notice. So I guess this means that this process will have to be stalled for a few months. I just fail to understand why my 2019 tax transcript would not be enough. I am not even on the loan, just a household member.

    #68018
    Nelsont
    Member

    The total financial picture of all household members is taken into account meaning whether you are on the loan or not your debt will be factored into the affordability of the loan holders income. If you didn’t work or don’t work then that’s fine. But if you did and yet you don’t have a transcript then you legally cannot prove you actually paid taxes (tax fraud by submitting a false return is relatively common) since the transcript is essentially a receipt from the IRS. Without that there is a possibility of an IRS lien or docked pay no matter how small that possibility is becomes a hard stop. Plus if you live in a common property state you may be required to be listed on the deed even if you are not on the loan which makes having the transcript even more important.

    #68019
    avant219
    Participant

    Shouldnt check stubs, 2019 tax transcript, and employment verification satisfy those requirements. 2018 taxes were not filed because I worked part time and did not make over 12200 which the irs says you dont have to file if you made less. But when my wife decided to do this program she said they would need 2018 and 2019 so I filed my 2018 in April.

    #68020
    MovingInMass
    Participant

    Even if they should, they don’t. But you don’t have to wait for a backlog or anything to clear — as previous posters including Tim Trumble of NACA wrote, the electronic versions are being processed again. In my experience, it takes 5 or 6 weeks for the transcript to show up in the system. So not too much longer. Du courage, mon frère!

    Also, better to do it now at qualification rather than later. At the qual stage, my income was judged to be pitiful and unstable enough (I’m a student) not to qualify for determination of PITI, so everything was based on my husband’s job and we didn’t do the verification of employment (VOE) for me. But when we got to the lender underwriting stage, the lender required both my income and my employment to be verified. We’re lucky in that it didn’t hold us up too much, but lots of people get stuck there because the companies they work for aren’t good about verifying on time or ever.

    Judging by everyone’s experience as expressed in this forum, it seems that the earlier you dot i’s and cross t’s the better.

    #68022
    avant219
    Participant

    The IRS is only processing electronic returns. They are not processing paper returns.

    #68023
    johnsoke
    Participant

    Yes I saw that someone didn’t catch that part too. Since you filled after the deadline it had to have filed by paper. It really does suck and I wonder if the bank are doing exceptions due to covid or saying well
    Your outta luck. That’s a tough one

    #68025
    avant219
    Participant

    Yea I does suck but it could be worse. Ill just have to wait hopefully itll be filed by July and we can proceed with the process. We have the entire action plan done except for the 2018 tax return transcipt. Thats why it really sucks.

    #68026
    johnsoke
    Participant

    Good luck! And keep us posted

    #68027
    avant219
    Participant

    Will do, thank you all for the assistance.

    #68050
    TTrumble
    Member

    Hello avant219,

    Regarding 2018, while the IRS gives you the option of not filing if you made less than $12,200, that does not cancel out the proof of income standards for mortgage loans that have existed since the Dodd-Frank act was enacted in 2008. Tax returns and tax transcripts are required without exception. It’s not something on which we have any flexibility.

    Even if we were to grant some leeway on tax transcripts during the Qualification step, you’ll never get past the Credit Access review without it because the bank will reject the application out of hand. So it’s better to make it an issue now than let you be qualified, sign a contract on a home then suddenly get stopped cold and put everything at risk.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    • This reply was modified 6 months, 3 weeks ago by TTrumble.
    • This reply was modified 6 months, 3 weeks ago by TTrumble.
    #70829
    suzukilovee
    Participant

    Will I be required to prove the 4506T if I already did my taxes and have my Account Transcripts. If the 4506T for those that can NOT obtain Account transcripts? Or do I need to have both completed?

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