Gcu Employee Tuition Remission Approval Form Page 2
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2Taxability of Tuition Remission Benefit
The Internal Revenue Code determines whether tuition remission benefits constitute a taxable fringe benefit to the employee.
Undergraduate Courses
•
The tuition remission provided for undergraduate courses for employees and their IRS Dependents is excluded from taxable
wages under section 117 of the Internal Revenue Code.
Graduate Courses
•
Section 127 of the Internal Revenue Code excludes from taxable wages up to $5,250 per year in tuition remission for
employees taking graduate courses. If the employee is a graduate student, but enrolled in an undergraduate level course,
the graduate course tax provisions are still applicable. All tuition remission provided for an employee’s spouse or dependent
is included as taxable wages.
Tax Reporting and Withholding
When the tuition remission benefit is a taxable fringe benefit for the employee, GCU will add the value of the benefit used to the
employee’s taxable income and the resulting taxes that are withheld will be included on the W-2 form.
For example: GCU Salary:
$35,000
Value of Tuition Remission Benefit Used:
$5,000
Taxable Wages Reported:
$40,000
The additional taxable income is subject to Federal, Social Security, Medicare, and State taxes. Example of withholding amounts:
Additional Taxable Wages Reported on
Type of Tax
W-2
Additional Taxes Withheld
Percent
Federal Income Tax
$ 5,000.00
$
750.00
15%
Social Security
$ 5,000.00
$
310.00
6.20%
Medicare
$ 5,000.00
$
72.50
1.45%
State
$ 5,000.00
$
175.00
3.5%
Total
$ 1,307.50
Tuition Remission Tax Schedule
When the tuition remission is determined to be taxable, then the additional taxes will be withheld from the employee’s paycheck. To
lessen the financial impact, the additional taxes owed will be divided into three payments (except for Winter Session) per the
following schedule:
Fall Semester:
3 installments, October, November, and December
Spring Semester:
3 installments, March, April, and May
Summer Session:
3 installments: July, August, and September
Winter Session:
1 installment: February
The University cannot dispense tax advice nor is it in a position to provide assistance with tax preparation. Please direct all such
inquiries to your tax advisor.
I have read and understand the GCU Tuition Remission policy. I understand that:
A completed Tuition Remission Form must be submitted before the start of each semester/session in order for the benefit to
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be applicable that semester/session.
This benefit covers only tuition – it does not cover the cost of fees, accelerated tuition rates, books, etc.
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This benefit is not available if the student has any outstanding bills.
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EMPLOYEE______________________________________________________________________DATE______________________
SUPERVISOR____________________________________________________________________DATE______________________
APPROVED
HUMAN RESOURCES______________________________________________________________DATE______________________
FINANCIAL AID__________________________________________________________________DATE______________________
For questions or inquiries about the GCU Tuition Remission program, please contact the Office of Human Resources.
Rev01/2015
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