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Possible taxable situations:
- Tuition for a spouse or dependent child(ren) is taxable if they are taking graduate or doctoral level classes.
- Tuition for Other Eligible Individuals on all class levels is taxable.
- Tuition for yourself (Employee) that is for graduate or doctoral classes is taxed on the dollar amount over and above the first $5,250.00 of tuition benefits paid per calendar year.
For the fall and spring semesters, the maximum number of pay periods to spread the payments over is eight. In order to take advantage of the maximum number of payments, the payroll office will need to receive the approved tuition waiver from Human Resources at least 1 week before the semester begins for both fall and spring semesters.
Below is an example of the impact that taxable tuition could have on your pay. Please keep in mind that the sooner you turn in a waiver the more pays it can be spread across.
Example 1: You are turning in a waiver for 3 credits @ $366/per credit hour. The total waiver would be in the amount of $1098. Shown below is the calculation on the full amount of tuition.
Tax Calculation on &1098.00
| Federal |
25% |
$274.50 |
|---|
| State |
4.25% |
$46.66 |
|---|
Social Security
|
6.20% |
$68.07 |
|---|
| Medicare |
1.45% |
$15.92 |
|---|
| Total tax on tuition |
|
$405.15 |
|---|
To break it down by a per pay amount, just divide the “total tax on tuition” by the number of pays that it will be spread across.
NOTE: Be sure to get tuition waivers turned in prior to calendar year-end to ensure proper reporting on your W-2.