Sonya Howell, director of payroll, attended our April meeting and gave a presentation about the Employee Tuition Exemption benefit program. We received a few questions that she didn’t have time to answer during the meeting, but written responses are provided below.
Q: Can the amount that is taken out of our paychecks for 2-3 pay periods (exceeding the amount of the IRS threshold) be shown on our 1098-T? Because eventually we are paying for that part of the tuition. If it is not shown on 1098-T, how do we claim it on our taxes?
A: The amount that is taken out of your paychecks for 3 pay periods only reflects taxes. The amount that exceeds the IRS limit of $5,250 reflects income. This amount is divided into 3 amounts and added to your paycheck as income for which taxes are calculated on and deducted.
The 1098-T is a statement that colleges and universities issue to select students. It provides the total dollar amount for qualified tuition paid by the student in a single tax year. Therefore, what you are paying above is taxes and not the cost of tuition.
Q: Is a graduate certificate from the Antonin Scalia Law School applicable for the tuition exemption? Also, if you live out of state but want to earn a degree, can you qualify for the tuition exemption?
A: Yes, employees can use the tuition exemption on courses for a graduate certificate. You can see all of the eligibility requirements on the tuition eligibility webpage. As long as the individual is a George Mason employee and is eligible per the criteria listed on the tuition eligibility webpage have no bearing on eligibility.
Q: Does the excess have to be reported as tuition assistance when filing your taxes or is it just coupled into your salary deduction?
A: This is a question to pose to a tax accountant. However, the excess amount is reported as income on your W2 for which taxes are calculated on.