Tuition Waiver Tax Reporting:

Waivers are generally reportable either as income or as a reduction to qualified tuition on the employee’s Form W-2 or 1098T respectively. The employee’s enrollment status as an undergraduate or graduate student determines the appropriate tax treatment for the waiver granted.

Depending on prevailing tax laws, the value of the tuition waiver at the graduate level may be excluded from income if the course is deemed to be job related. To meet the federal job relationship definition, the course must maintain or improve skills required for the job or be required by the employer as a condition of continuing employment. If the course is needed by the employee in order to meet the minimum education requirements of the job, the job relationship definition for tax exclusion may not be used. It is the responsibility of the employee and supervisor to determine if the course is “job related” or “required for continued employment” and mark the appropriate box on the Tuition Waiver form.

NOTE: *ECU’s Faculty/Staff Tuition Waiver program is a qualified educational assistance program; therefore, §127 allows for amounts up to $5,250 -that would normally be taxable under §117(d) -to be excluded from W-2 reporting for graduate students. Any waiver benefits in excess of $5,250 that are not job related are taxable and reportable on W-2 forms. Additionally, the value of any educational expenses (tuition and fees) paid by faculty/staff tuition and fee waiver cannot be used as the basis for any tax deduction or credit. So faculty/staff tuition waiver amounts will continue to be reported on 1098-T forms as a scholarship/grant.