Taxability of Graduate Level Tuition & Service Fee Waivers 

Graduate level tuition and service fee waivers that are a benefit of employment are considered taxable income by the IRS (I.R.C. § 127).  As a result, graduate assistants, pre-professional graduate assistants, and regular employees receiving tuition waivers as a benefit of employment may see a reduction in your take-home pay for the months of October, November and possibly December of the fall semester, and March, April and possibly May of the spring semester. 

There are some exclusions (e.g., I.R.C. § 117) that we cover in the video and course below.

Fellowships and scholarships are not considered employment by the IRS (Topic No 421 Scholarships, Fellowship Grants, and Other Grants). As a result, the University does not withhold on any stipends or waivers from fellowships if the individual is not subject to tax treaties with another country, and the responsibility of determining, calculating, and paying taxes (if applicable) is on the individual.

Enroll Now

To find out if you're affected, calculate the potential impact, and access other resources, enroll in the Earn course. Follow the steps below to enroll:

1. Click this link to the Taxability of Waivers module in Moodle. 

2. Click the NetID Login button & use your normal login credentials (requires 2FA)

  • *If you are using the Moodle-Only Login option (for those that are not students or employees in the University of Illinois System), you'll use the following password to enroll: SMMC

3. Scroll down to click the orange "Enroll Me" button under "Self-enrollment (Student)"

  • Note: You may need to click on the "Taxability of Waivers" tab to navigate to the appropriate module.

Resources

Below are some resources to assist you in preparing for the taxability of tuition waivers. Remember that it is against University policy for university employees to provide financial advice, including how to file individual taxes or provide guidance on individual situations for tax planning purposes.