Tax Exemption for Graduate/Doctorate Courses

The university manages its tuition remission plan in accordance with Internal Revenue Service (IRS) regulations. Undergraduate tuition benefits are generally exempt from tax withholdings The IRS allows up to $5,250 for graduate/doctorate level courses to be tax-exempt per calendar year. 

Tuition remission benefits received in excess of $5,250 are taxable (i.e. Federal, State, Social Security, and Medicare taxes) and are added to your gross income. Here is an example of a biweekly paycheck that is being taxed for graduate/doctorate level courses. For a graduate/doctorate course to be considered tax-exempt, it should have a direct correlation to the employee's primary benefits-eligible position. The course should also help an employee maintain or improve the skills required for the position. However, a course that is intended to help an employee pursue a new career or promotion, and/or meet the minimum requirements of a primary position, is not eligible for tax exemption. 

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Applying for Graduate/Doctorate Tax Exemption

The online graduate/doctorate course certification process is available only to university benefits-eligible employees. Eligible affiliate employees of CNMC, VA, N/AROTC will now apply online for tuition remission and graduate/doctorate course tax exemption.  

NEW! Starting in Summer 2024, the graduate/doctorate course tax exemption certification has been integrated into the Tuition Remission Application. Eligible employees taking a graduate/doctorate level course will apply for tax exemption in the same form as the tuition remission application. We have also added enhanced capabilities to make it easier for you to receive your tuition benefits such as the ability to apply for tax exemption for multiple courses in one application and an automatic credit cap.

Tip: You can only submit one application per semester so be sure to have your tax exemption documentation prepared before you apply for the tuition remission benefit. 

Resources to Help You Apply:

• Graduate Course Tax Exemption Online Application
• Tuition Remission Benefits Policy (PDF) 

Graduate Course Certificate Deadlines

Please note the deadline to submit the graduate course certification is earlier than that for the tuition remission application.  

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