Carnegie Mellon University

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May 09, 2018

Notice Regarding Taxation of Tuition Benefits

The Office of Human Resources has updated the process related to tuition benefits for employees. The updated process ensures that the university is in compliance with IRS guidelines regarding taxation of tuition benefits.

Beginning with the 2018 Summer Sessions, employees who apply for tuition benefits will be asked two additional questions:

  1. Do you have an undergraduate degree or higher?
  2. Are you currently enrolled in an undergraduate degree program?

Employees who have an undergraduate degree and are not enrolled in a second undergraduate degree program:

  • The first $5,250 in tuition benefits per calendar year is exempt from federal taxes. Tuition benefits that exceed $5,250 in a calendar year are subject to federal withholding.
    • Includes benefits for undergraduate courses taken while enrolled in a graduate program or as a visiting/non-degree student
    • Applies to courses taken at Carnegie Mellon or at another institution
    • Tuition benefits for courses taken at an institution other than Carnegie Mellon are also subject to state and local taxes, regardless of the benefit level.

Employees who do not have an undergraduate degree or who are enrolled in a second undergraduate degree program:

  • Tuition benefits for undergraduate courses taken at Carnegie Mellon are not subject to federal, state or local tax withholding.
  • Tuition benefits for undergraduate courses taken at an institution other than Carnegie Mellon are subject to state and local taxes, but are not subject to federal withholding.

Please direct any questions to the CMUWorks Service Center at cmu-works@andrew.cmu.edu or 412-268-4600.