Tax information for graduate assistants
Important information about graduate assistant taxation
Under federal law, the Internal Revenue Code §127 exempts tuition remission from being taxed for graduate assistants who teach or conduct research. Graduate service assistants do not meet the teaching or research requirement for full exemption, meaning, they do not hold a position with at least 50% research or teaching hours. However, the IRS still allows graduate service assistants to receive up to $5,250 in tuition remission tax free each calendar year.
When graduate service assistants serve a full-time contract and are fully enrolled during the spring semester, then serve another term during the fall semester of the same calendar year, the tuition remission received will exceed the tax-free amount of $5,250. Those graduate service assistants will see the value of the remission that exceeds $5,250 added as a TGT taxable amount to their paycheck and this amount will have a tax withholding the same rate as their federal W-4 withholding and state withholding.
Frequently asked questions
How do I access my tax forms like my W-2 or 1095c? Accordion Closed
Your tax forms can be downloaded through logging into your LOUIE. The following steps walk you through this process:
- Log into LOUIE.
- Select HR (HOME) from the dropdown at the top of the page.
- Select the Payroll and Compensation tile.
- On the left-hand, select Tax Forms W-2/1095c.
- Click the button ‘Tax Forms Here’ to be redirected to Equifax – Employee Services.
- Your recent tax forms will be displayed on the homepage. You can download them from there!
Who do I contact if I have questions about my taxes? Accordion Closed
Why are graduate service assistants being taxed on their tuition remission? Accordion Closed
This is required by federal law. Under Internal Revenue Service regulation (IRC 127), tuition remission awarded to graduate service assistants are considered taxable income once the total tuition remission amount exceeds $5,250. This means that graduate service assistants who receive more than $5,250 in tuition remission in a calendar year must be taxed on the amount exceeding the allowable amount.
How is the withholding amount determined? Accordion Closed
The value of the tuition remission exceeding $5,250 is subject to withholding tax based on the completed W-4 on file with the Human Resources Office. As such, the amount withheld may differ among graduate assistants. Questions should be directed to the Human Resources HR.Contact@nau.edu or (928) 523-2223
The tuition remission does not come in the form of a payment to me. How will the withholding be made? Accordion Closed
When the value of the tuition remission exceeds $5,250 in a calendar year, the excess is included as taxable income as non-cash earnings. This means you will not see a pay increase in your check, but rather the excess remission amount is added to your regular earnings. When non-cash earnings are added to your assistantship stipend, the University must calculate and withhold the additional tax due.
The withholding will be spread over the remaining months in regular semester-long contracts to minimize the impact of the deduction. The non-cash earnings over $5,250 from the Spring and Fall semesters will be taken from remaining November and December paychecks.
What happens to the taxes that are withheld? Accordion Closed
Both the amount of taxable income associated with the remission (amount exceeding $5,250 in the calendar year) and the taxes that the University withholds with respect to such income are reported on Form W-2. The taxes that the University withholds are forwarded to the IRS and credited to your tax liability for the year.
What should I expect as a GSA who has an assistantship in spring and fall of the same calendar year? Accordion Closed
You will be taxed on the excess remission above $5,250 for the calendar year. During November and December, your paychecks will have higher tax deductions than your previous paychecks. You should expect a lesser amount on your bi-weekly paychecks starting around November through the remainder of the calendar year.