Taxable Fringe Benefits
Taxability Determination of Tuition Paid on Behalf
of Employees by the University
Special circumstances may arise that necessitate the University aiding a faculty, unclassified staff, or classified staff member's payment of tuition beyond that which is available through the Staff Tuition Assistance Programs administered by Human Resource Services.
This event requires the employee to complete and forward a Determination of Tax Status Form along with the accompanying voucher to the Business Office for payment either directly to the institution of higher learning or to the employee as a reimbursement for tuition paid.
The Determination of Tax Status Form contains a set of questions that will facilitate the determination of reportable taxable income to the benefiting employee per Internal Revenue Service regulation. The form must be signed by both the employee and their immediate supervisor. The completed form will be forwarded to Budget and Human Resources Services whom will determine if the income is taxable to the employee under Internal Revenue Code Section (IRC) 132(d).
If the tuition is required to be reported as a taxable fringe benefit to the IRS based on this determination, the value of the tuition will be included in the employee's statement of wages (Form W-2) for the applicable calendar year. The employee will assume responsibility for the taxes owed on the amount received. The employee should refer to IRS Code Section 132(d) for further explanation of the regulation and what constitutes a taxable fringe benefit.