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Tuition Waiver - Tax Implications

Eligible Employees should note that the amount of the tuition waiver, if applicable, will be included in the Employee’s taxable income, which is subject to all payroll taxes, and reportable on the Form W-2 for the calendar year in which the course begins. These taxable amounts, which are defined as Wages-in-Kind, will increase the Employee’s Federal, State, Local and FICA taxable income and will generate additional withholding assessments against the Employee’s payroll wages. The Employee’s pay stubs and the annual Form W-2 will reflect taxable income and withholding amounts related to both payroll wages and wages-in-kind.

Please refer to the following matrix which identifies which type of courses would be subject to taxation:

Student

Undergraduate Program
(degree)

Graduate Program
(degree)

Adult/Continuing Education
(non-degree)

Eligible Employee

No tax liability

Amount of tuition and mandatory fees in excess of $5,250 in a calendar year is added as taxable income to the Employee unless approved for job-related tuition-fringe benefits

No tax liability

Spouse

No tax liability

Total amount of tuition and mandatory fees is added as taxable income to the Employee

No tax liability

Qualified Domestic Partner

Total amount of tuition and mandatory fees is added as taxable income to the Employee

Total amount of tuition and mandatory fees is added as taxable income to the Employee

Total amount of tuition and mandatory fees is added as taxable income to the Employee

Child (dependent)

No tax liability if child is claimed as dependent for federal tax purposes, either as a qualifying child or qualifying relative as outlined in IRS publication 501*

Otherwise, total amount of tuition and mandatory fees is added as taxable income to the Employee

Total amount of tuition and mandatory fees is added as taxable income to the Employee

No tax liability if child is claimed as dependent for federal tax purposes, either as a qualifying child or qualifying relative as outlined in IRS publication 501*

Otherwise, total amount of tuition and mandatory fees is added as taxable income to the Employee

Child (age 24 or older on the first day of the semester, or not claimed as a dependent on the Employee's tax return)

Total amount of tuition and mandatory fees is added as taxable income to the Employee

Total amount of tuition and mandatory fees is added as taxable income to the Employee

Total amount of tuition and mandatory fees is added as taxable income to the Employee

Child of Qualified Domestic Partner

Total amount of tuition and mandatory fees is added as taxable income to the Employee

Total amount of tuition and mandatory fees is added as taxable income to the Employee

Total amount of tuition and mandatory fees is added as taxable income to the Employee

The taxable amount will be proportionally added to each paycheck through the end of the calendar year. No individual tax withholding arrangements are permitted.

*See the Tuition Waiver Request Form for more information about claiming a child as a dependent for federal tax purposes.

Additional Tuition Waiver Information


Return to * Tuition Waiver Overview.

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