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ÌÇÐÄÔ´´ Tuition Remission / Tuition Waiver
ÌÇÐÄÔ´´ encourages employees, and their spouses, children and stepchildren, and contract employees to enroll for classes. For this reason, the university has a tuition remission benefit for all eligible employees, as well as their spouses, children and stepchildren, and contract employees.
Tax Implication: The federal government treats tuition and/or fees waived for graduate degree courses as taxable income to the employee, regardless of whether the courses are taken by the employee, spouse, or children/stepchildren.
Policy
Tuition Remission Eligibility and Benefits
| Employees | Retirees, Spouses, and Dependent Children and Stepchildren | Non-Dependent Children and Stepchildren | |
|---|---|---|---|
| Who is eligible? | Benefit-eligible employees (i.e. those employees that are 75% full-time equivalency or greater) | Benefit-eligible employees and their spouse, children, and stepchildren who meet the . Eligible retirees and their spouse, children, and stepchildren who meet the . | Children or stepchildren of an active benefit-eligible employee who DOES NOT meet the . |
| Degree level |
Undergraduate and graduate-level coursework, subject to the program's requirements. Professional programs including but not limited to Boonshoft School of Medicine and School of Professional Psychology degrees are excluded from this benefit. |
Undergraduate and master’s-level coursework, subject to the program's requirements. | Graduate-level coursework in a master's degree program only. |
| Tuition Remission Benefit | 100% of instructional fees. Maximum of 8 credit hours per semester. The benefit does not cover other fees. | 80% of instructional fees. The benefit does not cover other fees. | 50% of instructional fees. The benefit does not cover other fees. Benefit cannot be combined with any other institutional aid including grants, scholarships, and assistantships. |
| Taxable to employee? | The IRS considers graduate tuition waived above $5,250 in a calendar year to be taxable income to the employee. |
For retirees, graduate tuition waived above $5,250 in a calendar year is taxable income to the retiree. For spouses and children of active benefit-eligible employees and retirees, the IRS considers all graduate tuition to be taxable income to the employee or retiree. |
The IRS does not exempt graduate tuition provided under this benefit from the taxable income of the employee and any benefit used will be subject to applicable taxes. |
Examples
Example 1
Michael is an active ÌÇÐÄÔ´´ benefit-eligible employee and an undergraduate student enrolled in 12 credit hours during the spring semester. He is eligible for fee remission for 8 credit hours at 100% of the instructional fee. The remaining 4 credit hours are not eligible for fee remission and are Michael’s responsibility to pay.
Example 2
Sean is an active ÌÇÐÄÔ´´ benefit-eligible employee and a graduate student enrolled in 6 credit hours during the fall semester and 6 credit hours during spring. He is eligible for fee remission for each semester at 100% of the instructional fee. The total cost of instructional fees is $7,500. Because this amount exceeds the IRS tax-free limit of $5,250, the remaining $2,250 is considered taxable income to Sean and will be taxed accordingly through payroll deduction.
Example 3
Julie is an active ÌÇÐÄÔ´´ benefit-eligible employee and has a 19-year-old child, Chris, who MEETS the definition for an . Chris wants to enroll in undergraduate classes.
Using the chart above, Chris is eligible for the General Fee Remission benefit at 80% of the instructional fee.
Example 4
Brenda is an active ÌÇÐÄÔ´´ benefit-eligible employee with a 28-year-old child, Tonya, who DOES NOT meet the definition for an . Tonya wants to enroll in graduate classes.
Using the chart above, Tonya is eligible for the Non-Dependent Fee Remission benefit at 50% of the instructional fee. However, any tuition waived under this benefit will be considered taxable income to Brenda, and will be taxed accordingly through payroll deduction.
Disclaimer: This information is provided for general informational purposes only and does not constitute policy compliance or tax advice. Employees should consult a qualified tax professional regarding their individual tax situation or Human Resources if there are questions regarding eligibility or the final benefit.