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What classes and charges make up the amount of Tuition Waiver reported to The Office of Human
Resources? I do not agree with the amount reported to The Office of Human Resources.
As a matter of confidentiality and privacy, The Office of Human Resources does not have access to the details
of your student records or your student account. You may view the details of your student account online using
the Gothic Net portal or contact the Bursar’s office at (201) 200-3045. Any changes or corrections to your Tuition
Waiver charges must be processed through the Bursar’s Office
I am a graduate student. Are undergraduate-level courses counted toward the $5,250 annual exclusion?
Graduate Tuition Waiver is not covered under section 117(d) of the Internal Revenue Code, which fully excludes
undergraduate coursework. Graduate Tuition Waiver is, instead, covered under section 127 of the Code, which
sets an annual limit of $5,250 for the exclusion of employer-paid tuition expenses for both undergraduate and
graduate coursework. Therefore, all coursework taken by a graduate student, regardless of the level, counts
toward the annual exclusion.
I believe the graduate-level courses I am taking are related to my job and, therefore, qualify as a “working-
condition fringe benefit.” Why can’t I be exempt from tax withholding on my graduate courses? Can I
spread the collection of the additional tax withholding out beyond the scheduled timeframe?
All income is considered taxable when the benefit is received by the employee. The Office of Human Resources
is required to withhold the taxes in the calendar year in which the benefit is received.
Can I pay these taxes directly to the University rather than have them withheld from my paychecks?
The IRS does not permit the University to accept payments directly from an employee toward the employee’s
income tax withholding. Income taxes required to be withheld must be withheld from an employee’s paychecks.
•Can the University record the additional taxable income on my W-2 but not withhold any additional
taxes? I will pay them myself when I file my return.
While the IRS does allow employers to record the taxable income associated with certain benefits without
requiring additional income taxes to be withheld, educational assistance is not one of these benefits. The
University is required to withhold taxes for this additional income.
Why is the federal tax withholding rate so high? Can I change the withholding rate?
Income earned in addition to (supplemental) your regular salary is subject to the highest tax rate that you pay on
the federal graduated tax tables. The IRS defines a flat supplemental tax withholding rate, to be used for income
over and above an employee’s regular salary, which is pegged to the third lowest tax rate of the federal graduated
tax tables. This is currently set at 22%.
We cannot change the rate of withholding on this additional income. If you feel that your total federal income
tax withholding for the year will exceed your tax liability, you may submit a new W-4 Form to The Office of
Human Resources changing the number of exemptions you claim. Please see IRS Publication 505, available on
the IRS website, for instructions on how to estimate.