The Office of Human Resources Development (HRD) would like to remind our faculty and staff of the taxation of graduate-level tuition benefits. Current IRS regulations on employer-provided educational assistance require that the value of graduate-level education benefits taken by the employee in excess of $5,250 within a calendar year be recorded as income to the employee, making them subject to tax withholding. IRS regulations allow for an exception to this rule when:
- Graduate course(s) taken by the employee are required to maintain an employee’s current position
- Graduate courses are mandated to maintain a professional certification or licensure
- Graduate courses are required as a condition of employment for new hires
Employees seeking to add to their credentials by earning a graduate degree, or those hoping to advance professionally by pursuing an advanced degree, are not eligible for this exemption.
To apply for consideration of this tax exemption, you must complete and submit the Application for Tax Exemption of Graduate Level Course form to HRD no later than two weeks after the course begins. For your convenience, this form can be submitted via PeopleAdmin. (https://hartford.peopleadmin.com/hr).
Once you log in, (Log in is your email address without the @hartford.edu, password is your ID number)
- Click on the ellipse (...) in the top left corner and select Employee Records.
- Click on Available Forms on the left side of the screen.
- Click on the Application for Tax Exemption of Graduate Level Course form.
- Fill in the appropriate information
- Click the blue Save Final button
- Fill out the Signature Bar and click the box next to your signature
- Click Submit and you are good to go
- You will be notified by HRD once a determination is reached.
Employees who receive tuition remission for graduate level courses taken by their spouse and/or dependent child(ren) are subject to tax implications on the entire value of this benefit. The withholding amount will vary based on the number of credits taken per semester and the employee’s tax bracket. Any applicable tax withholdings will be taken directly from the employee’s paycheck during the semester in which the course(s) is taken.
If you have any questions regarding graduate-level education tax, please contact the Payroll Department at payroll@hartford.edu or at 860.768.4579.