Tuition Remission for Graduate Level Courses
Tax Implications for Tuition Remission for Graduate Level Courses
- Tuition Remission for Dependents: Tuition remission for graduate-level courses for your dependent(s) is always considered taxable income as per Internal Revenue Services (IRS) regulations. You will be taxed on the amount of the tuition remission during the semester of study.
- Tuition Remission for Yourself: Tuition remission in excess of $5,250 per calendar year for graduate-level courses for yourself is considered taxable income as per IRS regulations. You will be taxed on the amount above this threshold during the semester of study unless the course(s) is:
- required as a condition of employment or would maintain or improve the skills for the current position AND
- the course(s) will not qualify for the minimum educational requirements of the position AND
- the course(s) will not qualify the employee for a new trade or business.
If you believe that the graduate-level course(s) you are taking meet the above conditions, you may submit a request for a tax waiver as described below. Tax waiver requests are reviewed on a course-by-course basis by the Graduate Tuition Tax Waiver Review Committee and waiver is granted only if the request meets the IRS guidelines.
How to Apply for Graduate Tuition Remission Tax Waiver
Effective Fall 2023, the Graduate Tuition Remission Tax Waiver application has been integrated with the Tuition Remission Application. To apply for a tax waiver, please complete the “Graduate Tuition Remission Tax Waiver” section of the application. You will need to include the following information in our tuition remission application:
- Your job description and
- A detailed explanation as to how each course is directly related to your current position.
What to Expect After Submitting Your Graduate Tuition Remission Tax Waiver Request
Graduate tuition remission tax waiver requests are reviewed by the Graduate Tuition Remission Tax Waiver Committee within a week of receipt of the submission. You will receive an email from [email protected] informing you of the approval or denial of the request upon the Committee's review. If your request is denied, you will have an opportunity to provide additional documentation to support your request. Decisions made by the Committee after receipt of additional documentation are final.
Taxable Income for Graduate Tuition Remission – Paycheck Implications
If the graduate school tuition remission is for your dependent, Payroll Services will include the full amount of tuition remission in the semester that the tuition remission benefit is received.
If the graduate tuition remission is for yourself and you are not eligible for a tax waiver, Payroll Services will include the tuition remission amount over $5,250 (in a calendar year) as taxable income in the semester that the tuition remission benefit is received.
Payroll Services generally imputes this as additional earnings over a maximum of eight (8) payrolls within the semester. All income is considered taxable when the benefit is received by the employee. Therefore, the University is required to withhold and remit the taxes in the semester or session in which the benefit is received.