Your grants-in-aid may be subject to additional tax payments
Employees: Tuition for employees using grants-in-aid for themselves is 100% tax-exempt for undergraduate-level courses. Tuition above $5,250 for graduate-level courses is taxable.
Family: Tuition for spouses, domestic partners, and financially dependent children are 100% tax-exempt for undergraduate-level courses. 100% of tuition for graduate-level courses is taxable.
Taxable grants-in-aid by beneficiary type and amount
Annual tuition
|
Employee, Undergraduate
|
Employee, Graduate
|
Family, Undergraduate
|
Family, Graduate
|
< $5,250
|
Tax-exempt
|
Tax-exempt
|
Tax-exempt
|
Taxed at 22%
|
≥ $5,250
|
Tax-exempt
|
Taxed at 22%
|
Tax-exempt
|
Taxed at 22%
|
All non-exempt grants-in-aid are taxed at the supplemental tax rate of 22%. This rate is subject to change annually per the IRS. To calculate how much tax you will owe, please use the following formula: taxable eligible tuition x 0.22 = total tax payment.
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When will grants-in-aid tax payments be deducted from my paycheck?
NSHE Payroll Services is charged with executing tax withholdings and other payroll deductions. After the deadline to drop classes each semester, Human Resources provides information on employees who owe taxes on their grants-in-aid benefit to Payroll, and payments are scheduled as outlined below.
Schedule of automatic tax withholding from employees' pay for grants-in-aid
Semester |
Employees who are paid monthly |
Employees who are paid semi-monthly |
Fall/Summer |
Payments are deducted on November 1 and/or December 1* |
Payments are deducted on November 25 and/or December 10* |
Spring |
Payments are deducted on June 1 and/or July 1* |
Payments are deducted on on June 10 and/or June 25* |
*To reduce the financial burden on our employees, grants-in-aid taxes are typically split into two equal payments. Should your information not be delivered and processed in time for the first of the two payments, the entire payment will be deducted on the latter of the two dates listed for that semester.