Graduate Tax Information
Tuition Benefits for all graduate academic programs are taxable.
What is the taxable amount?
The taxable amount is the taxable portion of paid Tuition Benefits (for you and/or your spouse) that will be added to your taxable income. The taxable amount is NOT the actual tax withholding that will be deducted from your pay.
How do I determine the tax withholding to be deducted from my pay?
You may use the Graduate Tax Calculation Worksheet to help you determine the additional taxes you will pay. If you are completing the Worksheet for your spouse be sure to enter $0 on Line D (Exclusion Amount). The worksheet is provided as a tool. It is your responsibility to fully understand your tax liability and it may be helpful to consult with a tax professional.
Am I eligible for any IRS exclusions?
Employees enrolled in a taxable graduate program are eligible for an annual IRS exclusion for the first $5,250 of Tuition Benefits each calendar year. A spouse enrolled in a taxable graduate program is not eligible for the exclusion.
When are the taxes on Tuition Benefits withheld from my pay?
Tuition Benefits exceeding the annual IRS exclusion are considered reportable taxable income. The IRS requires taxation to occur in the same period in which the Tuition Benefit is received. The total taxable amount is divided and added to your taxable income over several pay periods:
- Fall Academic Term - October, November, December pay periods
- Spring Academic Term - March, April, May pay periods
- Summer Academic Term - July, August pay periods