Tuition Tax Exemption Requests
In limited situations, Employee Tuition Remission benefits might be deemed tax exempt. Certain IRS conditions apply, see bulleted list below. The decision is made by the employee’s supervisor, and reviewed by the Area Vice President or Dean, based on interpretation of tax law, acting in the best interest of the University.
- The education must improve the skills required of the employee in his or her current job;
- The education cannot be a requirement for the employee’s current position; and
- The education cannot prepare the employee for a new career.
The process for determining tax exempt Tuition Remission benefits includes submission of a request form, the course description and your Job Description, which can be obtained from HR.
Below are examples of situations that can affect the tax exempt decision:
John is an employee at Fordham University, enrolled in the Part-time JD program. The amount by which the benefit exceeds $5,250 will be considered taxable income. This excess is considered taxable income because a law degree will prepare John for a new career (practicing law), even if he does not intend to use the degree for that purpose.
Jennifer is a staff accountant at Fordham University, enrolled in the MBA program. Her job description states that an “MBA is preferred” but not required for this position. The entire value of Jennifer’s tuition reimbursement may be deemed tax exempt because it satisfies IRS conditions.
Juliana is a research assistant in the department of Chemistry at Fordham University, enrolled in the Graduate School of Social Services. The amount by which the tuition benefit exceeds $5,250 will be considered taxable income. Her job responsibilities as listed on her Job Description show no correlation to her academic curriculum.
Submitting a Request
Your submission of a tax exempt request is not automatically approved. You will be notified by your Dean or Area Vice President whether or not your education qualifies for tax free treatment under IRC 132(d) as a Working Condition Fringe Benefit. All determinations are final and not subject to appeal.
In order for Fordham University to properly administer tax exempt Tuition Remission benefits in accordance with the IRS requirements, we will require specific information regarding those employees who are enrolled in graduate programs and requesting a tax exclusion.
The following steps are effective as of September 1, 2019:
Step 1: Obtain a copy of your Fordham University Job Description (the formal Human Resources document). For Faculty, your CV copy and contract are accepted in lieu of the HR document.
Step 2: Download and complete this Tax Exclusion Request Form
Step 3: Obtain approval from your supervisor as well as the area Vice President or Dean, then submit to HR.
We recommend that you apply as early as possible. For planning purposes, the University can review “tax free” requests prior to applying or acceptance in a graduate program. You should never assume that you will qualify for tax free treatment, and should anticipate added tax withholding on your earnings.