Graduate Tuition Waivers for Employees or for Spouses/Dependents are Taxable
Want to avoid high withholding amounts near year-end? Learn more about graduate tuition waivers.
When the employee is the student:
Graduate Employee Tuition Waivers are taxable to the extent they exceed $5,250 a year. If you receive a total more than $5,250 in Graduate Employee Tuition Waivers for terms that occur in calendar 2017 (Spring, Summer and Fall 2017), USJ is required to record taxable income in your payroll record and to withhold taxes accordingly. Because of the way the timing works, the withholding requirement may not become effective until the fall and then may be substantial. To learn about the option USJ offers to have this withholding spread out over the year, see the document “Graduate Tuition Waiver Tax Recording Request,” which is available on MyUSJ at Human Resources and Payroll>Documents and Forms>Tuition Waiver Forms.
When the employee’s spouse or dependent is the student:
All of the above applies when an employee’s spouse or dependent receives graduate tuition waivers, except that the entire amount of the waivers is taxable income to the employee.