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Graduate Assistant Tuition Waiver Taxation - Frequently Asked Questions

Human Resource Services

As part of university policy, the tuition for graduate assistants is waived for individuals on a graduate assistantship appointment. Section 127/117of the IRS Tax Code, requires that educational assistance provided for graduate-level coursework in excess of $5,250 be added to employees' taxable wages and employment taxes withheld. This includes tuition waived for law students.

  • Are all graduate assistants subject to the additional withholding?

    No. The tax code provides that graduate assistants on research or teaching appointments are exempt from the $5,250 limitation. If you are not sure of your appointment type, please check with your hiring department, or contact HRS @ 753-6000.

  • Why am I being taxed on my tuition waiver?

    Federal law (IRC 127/117) requires that tuition waivers provided to graduate assistants exceeding $5,250 in the calendar year be considered as taxable income.

  • When will taxes be withheld from my paycheck?

    The university will begin withholding for all tuition waived and projected to be waived for the remainder of the calendar year as soon as possible. This is being done to minimize the impact of the additional income tax withholding on the individual. If the university were to wait until the $5,250 limitation is reached, it is possible that the additional taxable income would result in the graduate assistant not receiving any net pay. Graduate Assistants who are not projected to exceed the $5,250 limitation will not be taxed.

  • How is the amount of withholding determined?

    The tuition waiver amount in excess of the $5,250 exclusion will be taxed based on the individual current withholding as provided on the W-4 form. Employees wanting to change their withholding can do so by submitting an updated W-4 form to Human Resource Services. The form is located at http://www.hr.niu.edu/resources/files/Downloads/16800-2013%20Form%20W4.pdf?CFID=1103599&CFTOKEN=91045155

  • How will the taxable tuition be indicated on my paycheck or advice?

    The amount of the waiver, in excess of the $5,250 will appear on your paycheck or advice under the earnings code of TTR. This will indicate the per-pay period amount and will also show the year to date amount.

  • Will the taxes withheld be reported on my W-2 form?

    Yes, both the amount of taxable income (amount exceeding the $5,250) associated with the waiver and the individual withholdings will be reported on the W-2. The University will also report the withholdings to the IRS.

  • Is it possible that the tax withholding could result in my take home pay being significantly reduced or reduced to zero?

    Yes, your tax liability may result in a zero paycheck depending on the value of your waivers and your semi-monthly pay. To reduce this possibility the university has chosen to begin withholding immediately.