USF Employee Tuition Remission
As
part of USF’s comprehensive benefits package, eligible faculty and staff can
further their education, enhance their skills and pursue career development
through USF’s Tuition Remission program.
Dependents including spouses/LDAs and IRS tax dependents may also
be eligible to participate in this benefit.
For more information regarding eligibility, please contact gfcannella@usfca.edu or at 415-422-6851.
Application Process
To initiate the Tuition Remission (TR) process a Tuition Remission Application is required for each semester in which the employee
and/or dependent(s) would like to use the benefit. In addition to the form, documentation is required for the spouse, LDA, or IRS tax dependent using the benefit. For more information, please click here.
Applications must be received in the Office
of Human Resources no later than 5:00 p.m. on the following
dates:
| Semester |
Filing Period
|
Final Due Date
|
Summer Semester
|
March 1-15
|
March 15
|
Fall Semester
|
June 1-15
|
June 15
|
Intersession & Spring Semesters
|
November 1-15
|
November 15
|
**If these dates fall on a weekend or holiday, then the due date is the first business day following the stated due date.
Any employee thinking about enrolling or, who has not yet received acceptance in a
program, should submit a Tuition Remission Application form by the
deadline, since forms will not be accepted after the due date.
Please note that the person interested in taking courses must contact the Office
of Admissions regarding how to apply for a program and/or how to enroll in
classes. Please also note: employees must submit a Tuition Remission Application for each semester they or eligible dependents will be using the tuition remission benefit. Tuition Remission Applications will only be accepted during the filing period.
Impacted Courses for 2011/2012
Certain programs are not eligible under the tuition remission benefit if deemed impacted (programs that are full). The list of impacted programs is posted by May 1st of each year for the following academic year. Current impacted programs include:
- Law - FT
- MSFA (Master of Science Financial Analysis)
- Masters in Marriage & Family Therapy
- Masters Entry Option Program in Nursing
*Employees covered by a CBA should refer to their agreement for specific exclusions and/or limitations.
Graduate Course Taxability and Applying for Tax Waiver (Employees Only)
Graduate coursework is considered a taxable benefit for Spouses/LDAs and/or IRS Tax Dependents. Employees taking graduate coursework may also be taxed unless the employee qualifies for a tax waiver based on IRS guidelines.
Employees taking graduate courses may also be taxed unless they qualify for the working condition fringe tax exclusion. Pursuant to Treasury Regulation Section 1.162-5(a)(1) graduate educational expenses of an employee (but not of a dependent, spouse, or LDA) may be eligible for exclusion from taxable income under Section 132(a)(3) of the Internal Revenue Code as a "Working Condition Fringe" if the education:
- Maintains or improves skills required by the individual in his employment or other trade or business, or
- Meets the express requirements of the individual's employer, or the requirements of applicable law or regulations, imposed as a condition to the retention by the individual of an established employment relationship, status, or rate of compensation.
Notwithstanding the foregoing, Treasury Regulation Section 1.162-5(b)(2) provides that expenditures for education are NOT excludable from taxable income under Section 132(a)(3) of the Internal Revenue Code as a Working Condition Fringe if the educational expenses:
- Are incurred to meet the minimum educational requirements for the individual’s current position; or
- Qualify the individual for a new trade or business.
If the employee believes that his/her position meets the criteria for the graduate tax waiver as
listed above then the employee must request a memo from the employee’s supervisor/manager/dean that states how the employee’s position meets the
above IRS criteria, and submit it to the Human Resources Specialist, Gregg Cannella, for review no later than 30 days before the first day of classes. The Office of Human Resources will determine if the employee requesting the graduate tax waiver meets the IRS criteria. Once reviewed, the Office of Human Resources will send a notice to the employee informing the employee of the determination.
Tuition Remission Taxation
The Internal Revenue Service (IRS) and the State of California Franchise Tax
Board determine the taxability of certain tuition benefits received by an
employee to include tuition benefits received by the employee, his/her dependant(s)
or LDAs. The taxation is based upon the student-to-employee
relationship and the course level of the classes taken. Under certain
conditions, IRS does allow an exemption of $5,250 per year per employee
(Section 127 of Internal Revenue Code. Note: IRC Sec. 127 only applies to employees; it does not apply to spouses, dependents or LDAs [unless they are ALSO employees]).
| Course Level |
Student is Employee |
Student is Spouse or Dependant Child of
Employee |
Student is LDA
|
Undergraduate, Graduate Research Analyst,
Certificate Programs and non-Credit Classes Below the Graduate Level
|
Not Taxable |
Not Taxable |
Federal - Taxable State - Not Taxable
|
| Graduate |
Federal - Taxable State - Taxable
|
Federal - Taxable State - Taxable
|
Federal - Taxable State - Taxable
|
| Exemption Amount |
$5,250
annually in calendar year (Jan-Dec). |
0.00 |
0.00 |
| Waiver Possible |
Yes |
No |
No |
Additional Notes for LDAs
1. If the LDA is a tax dependent
of the employee the undergraduate tuition benefits are not taxable (for
either California or federal income tax purposes);
2. If the LDA is not a tax
dependent of the employee but is legally married to the employee (either
under California law or another state's law that recognizes same sex
marriage), the undergraduate tuition benefits are not taxable for California
income tax purposes (but remain fully taxable for federal income tax
purposes);
3. If the LDA is not a tax
dependent of the employee, is not legally married to the employee, but
is a Registered Domestic Partner of the employee, the undergraduate
tuition benefits are not taxable for California income tax purposes (but remain
fully taxable for federal income tax purposes);
4. If the LDA is not a tax
dependent of the employee, is not legally married to the employee, is
not a Registered Domestic Partner of the employee, the undergraduate
tuition benefits are taxable for both California and federal income tax
purposes.
In accordance with applicable federal and state tax laws, USF will withhold taxes from the
employee's gross wages according to the following schedule. The total
taxable tuition remission benefit amount will be divided by the number of months listed below. The
IRC Sec. 127 $5,250 qualified exemption (if applicable) will be applied during the first
tuition application terms in the year until the entire $5,250 exemption is
exhausted. Course add and drop activity will be integrated into the
billing cycle(s) on a monthly basis and is contingent upon timely completion of
necessary paperwork. If the paperwork is not received in the appropriate
department (Academic Enrollment Services or Human Resources) in a timely fashion, the amount of the
tuition benefit will be taxed over a shorter period of time thereby increasing
the tax withholding amounts and decreasing the employee's net pay. Any and all adjustments will be made in a payroll period dedicated to adjustments (as detailed on chart below).
| Term |
#Months |
Month1 |
Month2 |
Month3 |
Adjustments |
| Intercession |
1 |
Jan |
N/A |
N/A |
|
Spring
|
3 |
Feb
|
Mar |
April |
May |
Summer
|
3 |
June |
July |
Aug |
Sept
|
Fall
|
3
|
Oct
|
Nov
|
Dec
|
Dec
|
By the 15th of each month during the taxing period, the Payroll Office will
send an email to the employee outlining the amount of benefit taxed and due to
be taxed in the year. Employees who do not receive this email, but who
expect to be taxed are responsible for notifying the Payroll Office that they
should be taxed. Tax periods cannot be extended past the term noted on the above table for any reason.
If an employee's gross pay is not sufficient to cover
the tax liability, he/she will be required to pay the taxes owed prior to the
first day of classes; otherwise, the student receiving these tuition remission benefits will be administratively withdrawn.
If an employee terminates employment within a taxing period, he/she will be required to pay the taxes owed or disenroll from classes prior to the termination date.
Questions related to the taxable remission amounts should be directed to
Payroll Office at x2837.
Tuition Remission Taxation Examples
Case 1: Sally is a System Analyst (staff member) of the
ITS Department. She takes 12 credit hours of undergraduate course work in
the Fall Term. She applies for and is approved to receive the Tuition Benefit.
The tuition benefit received is $12,000. Since the course work is
undergraduate, Sally is not taxed.
Case 2: Sam is a Public Safety Officer (staff member) of the
Public Safety Department. He takes 15 credit hours of graduate course work
in Spring Term, which is completely unrelated to his job (and therefore non-eligible for the tax waiver treatment described above). The tuition benefit received is $15,000. This is the
first tuition benefit received in the calendar year. The amount of taxable
benefit is $9,750 ($15,000 less $5,250). In February, March, April
and May, Sam's gross taxable income will be increased by $2,438 per month. Sam is in the 35% marginal tax bracket. Therefore, Sam's overall net pay will be
reduced by $853.30 per month.
Case 3: John is Sally's youngest son (from Case 1). John is
taking undergraduate level classes for $5,000. This benefit is not
taxable. In contrast, Sally's oldest son Tom is taking $12,000 of graduate
level classes in Fall. This $12,000 is fully taxable to Sally. Sally is in the 22% tax bracket. Therefore, Sally's gross taxable income
will be increased by $4,000 per month in October, November, and December, and net pay will be reduced by $880.00 per month.
Case 4: Michael is a Part Time Faculty member and is currently not teaching in Summer Term. Michael can use the Tuition Remission Benefit,
but he does not have a gross wage from a current assignment.
His son takes 3 credit hours of graduate work (taxable) and
the tuition benefit received is $2,600. Michael
must pay the tax directly at the yearly taxation rate, approximated at 42%.
Michael must pay $1,092 directly to Payroll Services before the first
day of classes.
| Spring & Intersession Cycles Integration Schedule |
Count |
DATE |
201110 & 201120 Term Codes
|
Census Date |
02/11/2011 |
|
|
|
Monthly Payroll (MO)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 3 and added
|
1
|
02/25/2011
|
to wage base in 3 periods followed by one adjustment
|
2
|
03/25/2011
|
cycle (if needed).
|
3
|
04/26/2011
|
| |
Adjust
|
05/26/2011
|
| |
|
|
Semi-Monthly Payroll (SM/SH)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 6 and added
|
1 |
02/15/2011
|
to wage base in 6 periods followed by one adjustment
|
2 |
03/01/2011
|
cycle (if needed).
|
3 |
03/15/2011
|
| |
4 |
04/01/2011
|
| |
5 |
04/15/2011 |
| |
6 |
05/02/2011
|
| |
Adjust
|
05/16/2011
|
| Summer Cycle Integration Schedule |
Count |
DATE |
201130 Term Code
|
Census Date |
06/03/2011 |
|
|
|
Monthly Payroll (MO)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 3 and added
|
1
|
06/27/2011
|
to wagebase in 3 periods followed by one adjustment
|
2
|
07/26/2011
|
cycle (if needed).
|
3
|
08/26/2011
|
| |
Adjust
|
09/26/2011
|
| |
|
|
Semi-Monthly Payroll (SM/SH)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 6 and added
|
1 |
06/15/2011
|
to wage base in 6 periods followed by one adjustment
|
2 |
07/01/2011
|
cycle (if needed).
|
3 |
07/15/2011
|
| |
4 |
08/01/2011
|
| |
5 |
08/15/2011 |
| |
6 |
09/01/2011
|
| |
Adjust
|
09/15/2011
|
| Fall/Winter Integration Schedule |
Count |
DATE |
201140 Term Code
|
Census Date |
09/09/2011 |
|
|
|
Monthly Payroll (MO)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 3 and added
|
1
|
10/26/2011
|
to wage base in 3 periods followed by one adjustment
|
2
|
11/23/2011
|
cycle (if needed).
|
3
|
12/22/2011
|
| |
Adjust
|
Year End
|
| |
|
|
Semi-Monthly Payroll (SM/SH)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 6 and added
|
1 |
09/30/2011
|
to wage base in 6 periods followed by one adjustment
|
2 |
10/14/2011
|
cycle (if needed).
|
3 |
11/01/2011
|
| |
4 |
11/15/2011
|
| |
5 |
12/01/2011 |
| |
6 |
12/15/2011
|
| |
Adjust
|
12/22/2011
|
| Intersession Cycles Integration Schedule |
Count |
DATE |
201210 Term Code
|
Census Date |
01/04/2012 |
|
|
|
Monthly Payroll (MO)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Remission Benefit added
|
1
|
01/26/2012
|
to wage base in January Payroll month.
|
|
|
| |
|
|
Semi-Monthly Payroll (SM/SH)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Remission Benefit
|
1 |
01/13/2012
|
| Divided by 2 and added to wage base in January Payroll |
2 |
02/01/2012 |
periods.
|
|
|
| |
|
|
| Spring Cycle Integration Schedule |
Count |
DATE |
201220 Term Code
|
Census Date |
02/10/2012 |
|
|
|
Monthly Payroll (MO)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 3 and added
|
1
|
02/27/2012
|
to wage base in 3 periods followed by one adjustment
|
2
|
03/26/2012
|
cycle (if needed).
|
3
|
04/26/2012
|
| |
Adjust
|
05/26/2012
|
| |
|
|
Semi-Monthly Payroll (SM/SH)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 6 and added
|
1 |
02/15/2012
|
to wage base in 6 periods followed by one adjustment
|
2 |
03/01/2012
|
cycle (if needed).
|
3 |
03/15/2012
|
| |
4 |
04/02/2012
|
| |
5 |
04/16/2012 |
| |
6 |
05/01/2012
|
| |
Adjust
|
05/15/2012
|
| Summer Cycle Integration Schedule |
Count |
DATE |
201230 Term Code
|
Census Date |
TBD |
|
|
|
Monthly Payroll (MO)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 3 and added
|
1
|
06/26/2012
|
to wage base in 3 periods followed by one adjustment
|
2
|
07/26/2012
|
cycle (if needed).
|
3
|
08/27/2012
|
| |
Adjust
|
09/26/2012
|
| |
|
|
Semi-Monthly Payroll (SM/SH)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 6 and added
|
1 |
05/31/2012
|
to wage base in 6 periods followed by one adjustment
|
2 |
06/15/2012
|
cycle (if needed).
|
3 |
07/02/2012
|
| |
4 |
07/16/2012
|
| |
5 |
08/01/2012 |
| |
6 |
08/15/2012
|
| |
Adjust
|
08/31/2012
|
| Fall/Winter Integration Schedule |
Count |
DATE |
201240 Term Code
|
Census Date |
TBD |
|
|
|
Monthly Payroll (MO)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 3 and added
|
1
|
10/26/2012
|
to wage base in 3 periods. Adjustment included in final
|
2
|
11/26/2012
|
payroll (if needed).
|
3
|
12/21/2012
|
| |
|
|
Semi-Monthly Payroll (SM/SH)
|
Cycle #
|
PAY DATE
|
Taxable Portion of Tuition Benefit Divided by 6 and added
|
1 |
09/14/2012
|
to wage base in 6 periods followed by one adjustment
|
2 |
10/01/2012
|
cycle (if needed).
|
3 |
10/15/2012
|
| |
4 |
11/01/2012
|
| |
5 |
11/15/2012 |
| |
6 |
11/30/2012
|
| |
Adjust
|
12/14/2012
|