Tuition Remission The Payroll Perspective 1

My Tuition Benefit  The total of your Tuition Benefit is listed in Checkmarq   Log in using your username and password 2

Checkmarq  Click On:  Self Service  Campus Finances  Account Inquiry  Activity  Tuition Remission Benefit is listed as  Employee Remission or  Spouse Remission or  Dependent Remission 3

Checkmarq  Tuition Benefit Remission amount  Costs of the classes taken  After financial aid has been applied  Scholarships  Grants  Other fund sources 4

Tuition Remission and Taxes  Undergraduate Students  Undergraduate classes – tax exempt  Graduate level classes – tax exempt  Graduate Students  Undergraduate classes – taxable  Graduate level classes - taxable 5 Tuition Remission is taxable or tax exempt based upon the status of the enrolled student. Note: These guidelines apply unless approved by the Graduate School or specifically listed in the University Policy

Employee Remission  The 1 st $5,250 is tax exempt  Tax exemption is applied first  (Usually in the Spring Semester)  Tuition Remission Benefit amounts above $5,250 are taxable 6

Spouse Remission  Entire Remission Benefit is taxable 7

Dependent Remission  Entire Remission Benefit is taxable 8

Tuition Remission and Taxes  Tuition Remission follows a calendar year.  Begins January 1 st  Ends December 31 st 9

Tuition Remission and Taxes  Tuition Benefit is distributed across pay checks over the following periods  Spring Semester  January through May (5 months)  Summer Semester  June through August (3 months)  Fall Semester  September through December (4 months) 10 *Contingent upon receipt of Tuition Benefit information

Tuition Remission and Taxes How to Calculate Remission  For example your tuition remission may look similar to this: 11 Spring $5,000 Summer $2,000 Fall $5,000 Total $12,000 Biweekly approx 9-11 paychecks Monthly approx 4-5 paychecks In this example, the employee’s pay check shows different tuition remission amounts depending on the semester. In the Spring, the $5,000 will be divided over the Spring 2013 semester January-May (5 months). In the Summer, the $2,000 will be divided over the Summer 2013 semester June- August (3 months). In the Fall, the $5,000 will be divided over the Fall 2013 semester September- December (4 months).

Tuition Remission and My Payroll Check  Review pay slip:  Amount appears as  Employee Remission or  Dependent Remission 12

Tuition Remission and My Payroll Check  Employee/ Dependent Remission Amount =the taxable amount, not the tax.  Remission Benefit is taxed at the same rate as your regular pay  Each employee’s taxes may be different based on many variables:  Marital status, W4 allowances, pre-tax deductions, etc…. 13

Tuition Remission and My Payroll Check  How do I figure out the taxes related to the Remission Benefit?  Consult a tax advisor  Compare a similar check –Total Current Taxes  One with the Tuition Remission Benefit, and  One without the Tuition Remission Benefit  Paycheck Calculators: 14 *MU Payroll Department can not provide tax advice.

Things to Remember  A change in Remission Benefit in the current month Will not reflect until the following month  The amount of Tuition Remission is the amount of income that is taxed, not the amount deducted from your check. The deduction to your pay is the tax on the Tuition Remission  Can change your W4 allowances to manage tax implications (consult a tax advisor) 15