The Educational Assistance Programs are governed by federal tax regulations as well as University policies. Please thoroughly review the applicable Guidelines and, if applicable, consult with your tax advisor and/or institution's financial aid advisor about how payments may affect your taxes or your child's financial aid.
Currently, for academic courses below the graduate level at a tax-exempt educational institution, up to $5,250 of STRP or departmental assistance can be excluded from an employee's gross income under section 117 and/or 132 of the Internal Revenue Code.
If the assistance exceeds $5,250 in one tax year regardless of the source of University funds, the reimbursement will be reported by the department as income on the employee's paycheck. (See Guide Memo 2.1.12 for additional tax information.)
Tuition payments are non-taxable if your child is claimed as your dependent on your federal income tax return for the year that includes the tuition payment date. The payments are made directly to the institution on behalf of your eligible child. These payments are excluded from your gross income for federal income tax purposes and are non-taxable. If your child is not claimed as your dependent on your (or, if you die, your surviving spouse's) federal income tax return, the benefit is considered taxable compensation.
This program for tuition benefits could affect other financial aid benefits. Contact the Financial Aid Office at the college, university, or institution to be attended for more information.
