Is the Tuition Fee Waiver Taxable?

The tuition fee waiver for an undergraduate taking courses is not taxable for employees or their dependents. Once a student has received a bachelor’s degree, any classes paid for by an employee tuition fee waiver must be taxed per the IRS regulations.

Current regulations state that any university employee who has at least a bachelor’s degree is exempt from tax on the first $5,250 of the tuition fee waiver value each year. Amounts exceeding $5,250 annually are taxable.

The employee’s dependents will be taxed on the full value of the tuition fee waiver once they receive a bachelor’s degree. These taxable amounts will cause additional taxes to be withheld from your paycheck for the following periods:

  • April and May for spring classes.
  • September and October for summer classes.
  • November and December for fall classes.

The tuition fee waiver is a benefit for full-time, eligible employees, their spouse and eligible dependent(s) and unmarried children.

Part-time faculty members are eligible for a tuition fee waiver of up to four credit hours each semester that they teach. This benefit is for the faculty member only and must be used during the semester the faculty member is teaching, or the semester immediately following.

Employees may enroll for the tuition fee waiver by completing the Tuition Benefit Request Workflow in FlashLine. The workflow can be found in Flashline by selecting Workflows from the Employee section. Under HR & Employee Workflows, scroll down and click on Tuition Waiver Benefit Request in the middle column.

For specific details on the tuition benefit, refer to Policy 3342-6-09.1, administrative policy and procedures regarding tuition benefits. For questions or more information, contact the Benefits Office at 330-672-3107 or benefits@kent.edu.