TAP applications for Summer 2023 open tomorrow, March 15th. In light of applications opening, we wanted to take a minute to remind everyone of a change to how TAP is taxed. Previously, any amount over $5,250 granted for TAP was considered taxable income. However, as of the end of 2022, there have been two major changes to that rule:
- The TAP benefit is no longer taxable for TAP participants taking undergraduate courses, even those who exceed the $5,250 benefit limit.
- The TAP benefit continues to be taxable for participants taking Graduate level courses over the $5,250 limit unless they are approved for a waiver. In order to be eligible for approval for the waiver, each individual course would need to improve the employee’s knowledge and performance in their current duties. If the education is to meet the minimum requirement for the current job, to qualify for a promotion or salary increase, to qualify for a transfer or is being taken as a hobby, it would NOT be eligible for a tax waiver – and taxes would apply on the benefit over $5,250.
The updated TAP policy is available here.
The USG TAP website has been updated with the new requirements along with the new TAP application and Graduate Student Tax Waiver forms. We wanted to make sure you were aware of this change.
Going forward, graduate students who wish to apply for a tax waiver will need to complete and turn in both, the TAP application and the TAP Graduate Student Tax Waiver form each semester and be approved by their supervisor and the home institution TAP coordinator to receive a tax waiver for those courses. Supervisors must sign acknowledging/approving that they have reviewed the employee’s course(s) and that it/they do improve the employee’s knowledge and performance in their current duties based on the employee’s current job description. The TAP Coordinator will then provide review and final approval for the tax waiver. All classes may not apply towards the waiver and the courses are looked at on an individual basis to ensure each one meets the above conditions. The TAP Graduate Student Tax Waiver and updated TAP application forms are located on the USG TAP website.
If you have any questions regarding this change or would like more information on the USG’s Tuition Assistance Program, please contact the GHC TAP Coordinator, Cory McElroy, at cmcelroy@highlands.edu or 678.872.8128.