Tax implications on graduate assistantships

Posted by Lori Shull - Wednesday, November 07 2012
lshull@tntech.edu

 

Each year, the Office of Graduate Studies and the Financial Aid Office send a listing of the annual tuition benefits paid on your behalf. For some assistantships, any amount more than $5,250 is taxable income. This amount will be added to the taxable income on your Dec. 21 paycheck and will increase your tax liability and possibly your federal income tax deduction. This amount does not increase your net pay.

If you have any questions regarding the amount added to your taxable income, please contact the Office of Graduate Studies.

If you want to change your W-4, the form is here. This form must be in the Human Resource Office by 4:30 p.m. Thursday, Dec. 6, to process on the 12/21 paycheck.

If you have questions regarding the W-4 process, contact the Human Resource Office.

Here is an explanation of how the IRS treats assistantships:

Tuition benefits offered to graduate assistants are generally excluded from taxable income under section 117(d) of the Internal Revenue Code (IRC). However, section 117(d) only excludes from taxable income tuition benefits for graduate students who are engaged in teaching activities or research activities at the University. Graduate assistants not engaged in such teaching or research activities at the University and, therefore, tuition benefits that exceed $5250 in a calendar year cannot be excluded from taxable income under section 117(d).