Eligible employees and official 91社区 retirees receive a full waiver of fees for undergraduate and graduate courses, some restrictions apply per Fee Waiver Policy. Spouses and dependents of employees receive a waiver of 75% of student fees for undergraduate and graduate courses, some restrictions apply per Fee Waiver Policy. Fee Waivers are automatically processed, then approved or denied per fee waiver policy. See FAQs below for more information on the process.聽 聽
For more details and information on certain lab and miscellaneous fees are outlined in the聽University Handbook, Section C.11.
Eligible employees and official 91社区 retirees also may receive a waiver of fees for noncredit courses held on campus through Outreach and Engagement.
Attention - Taxes may apply to your Fee Waiver benefit
Employees who are taking Graduate Classes:聽
Section 127 of the Internal Revenue Code states that college and university employers are required to withhold applicable taxes on graduate tuition assistance provided to employees over the amount of $5,250 per calendar year. This means classes billed in the applicable calendar 测别补谤.听
This taxation requirement will only pertain to the dollar value of employer-provided educational assistance for graduate classes; undergraduate classes are not affected.聽 The dollar value amount of graduate fee waivers are tracked, and this amount will be included on the employee鈥檚 W-2 as taxable wages.聽 The University is required to withhold federal, state and local taxes in addition to social security taxes on this taxable fringe benefit.
NOTE: Since the first $5,250 in fee waivers are not taxed, typically employees will see the taxes apply in the fall, and specially in December. If you are talking classes that are taxable please plan to pay the taxes in December. This happens because spring classes are invoiced and the fees are waived in December.聽
Employees who have a dependent taking Graduate classes:
Section 127 of the Internal Revenue Code states that college and university employers are required to withhold applicable taxes on graduate tuition assistance provided to dependents of employees.
This taxation requirement will only pertain to the dollar value of employer-provided educational assistance for graduate classes; undergraduate classes are not affected.聽 All employees, whose dependents are receiving a fee waiver for any graduate-level class, will be subject to tax.聽 The dollar value amount of dependent graduate fee waivers are tracked, and this amount will be included on the employee鈥檚 W-2 as taxable wages.聽 The University will withhold federal, state and local taxes in addition to social security taxes on this taxable fringe benefit.
NOTE: Every effort is made to tax the benefits as they are paid, but often the taxes are due in the fall, specifically December. This happens because spring classes are invoiced and the fees are waived in December.聽聽
How to plan for taxation:
As stated, every effort is made to tax employees over multiple pays if needed, but at the end of the year, it is not always possible.
If you know that you or your dependents are taking graduate classes, you can estimate your tax and save throughout the 测别补谤.听
For Example: An employee taking graduate classes and estimate that they will have $10,000 in fee waivers applied. Since the fee waivers are for the employee, then we know that the first $5,250 is not taxable so the balance to be taxed will be $4,750. The Federal, State, Local, Social Security and Medicare taxes generally run about 30% of the taxable amount. When we multiply $4,750 x .30 it equals $1,425 in taxes owed. Of course every semester is different and the taxable amounts will vary, but in this example the employee is paying $1,425 for $10,000 in classes. Employees should keep in mind that some of the taxes collected could get refunded when filing taxes, depending on income.聽聽
| Total Fee Waivers | $10,000 |
| Less Non-Taxable amount | -$5,250 |
| Estimated Taxable Amount | $4,750 |
| Estimated Tax | $1,425 |
FAQs
In order for fee waivers to process automatically, HR needs to know your dependent鈥檚 information. You will need to ensure your dependent is listed in the BANNER system. If your dependent is on one of your insurance plans, then they will be in BANNER. If you are unsure, please reach out to a Human Resources representative at feewaivers@usi.edu.
There are many factors that cause fee waivers to be denied, be sure to check these common issues:
- For employees, ensure that no more than 15 credit hours per academic year have been attempted
- For employees, ensure that no more than six credit hours per semester (Fall and Spring); and/or no more than 6 credit hours per summer term or a maximum of 12 summer credit hours have been attempted
- For dependents, ensure no more than 132 credit hours have been attempted
- For dependents, ensure that your dependents are listed with Human Resources
- For children, ensure they are under 24 years of age and are an eligible dependent
The process for non-credit courses is to complete an application and seek approval. Employees need approval for classes that occur during work hours. Not all costs are covered by fee waivers, so if an employee is taking the course as part of their position at the University, the department may cover the cost. Approval is needed for the those costs to be covered by the department. Apply online for fee waivers for non-credit courses.
The Division 1 Athletic Fee is not waived by a tuition fee waiver.聽
The Archie Book Bundle is not waived by a fee waiver. It is however only applicable to undergraduate classes and anyone can opt-out of the program.聽
You may take classes over the employee term and academic year limits, but you will be responsible for those classes that are over the limit. Employees can complete the FAFSA and scholarships to cover classes over the limit. If a dependent needs to take classes beyond the attempted hours allowed, they too can complete the FAFSA and apply for scholarships.
It depends. The IRS allows Universities to apply tuition assistance for undergraduate courses at no costs, but graduate courses are taxable income. For dependents all graduate fee waivers are taxable and for employees graduate fee waivers over $5,250 are taxable. See the Fee Waivers and Course Enrollments鈥� Policy in the 91社区 Handbook for more information.聽
Reports are generated quarterly to access the tax and you will be notified when the tax will apply. To estimate how much the tax will be, take the taxable fee waiver amount times 30%.聽
For questions regarding fee waiver policy, please reach out to a Human Resources representative at feewaivers@usi.edu. Take the time to review the Fee Waiver Policy in the聽University Handbook, Section C.11.