To: All Grad Students <everybody@illinois.edu> 
    From: "Katharine Kral" <kkral@uiuc.edu>
Reply-To: tpalumbo@uiuc.edu

 Subject: MASSMAIL - Taxability of Certain Tuition and Fee Waivers

The Board of Trustees of the University of Illinois
Educational Assistance Plan Notification
__________________________________________________________

To:		All Graduate and Professional Students
From:		Katharine Kral, Assistant Vice President for Business and 
Finance
Re:	Important Notice about Taxability of Certain Assistantship Tuition 
and Service Fee Waivers

This notice is being sent to all graduate and professional students who are 
eligible to hold assistantship appointments accompanied by tuition and 
service fee waivers.  

Current tax law exempts Teaching Assistants (TAs), Research Assistants 
(RAs), and most Fellows from having to pay taxes on tuition and service fee 
waivers associated with these appointments.  
 
While examining the implications of the Economic Growth and Tax Relief 
Reconciliation Act, the University determined that it is necessary to 
document and track the taxability of tuition and service fee waivers 
provided to Graduate Assistants (GAs) and Pre-professional Graduate 
Assistants (PGAs). 

The circumstances under which some or all of a GA's or PGA's tuition and 
service fee waiver may be tax exempt are described below.  

-First, in compliance with Internal Revenue Code Section 127, $5,250 per 
calendar year in tuition and service fee waivers associated with GA and/or 
PGA appointments is excluded from taxable income.  This pertains to all GA 
and PGA appointments. 

-Second, under other Sections of the Internal Revenue Code, GA and PGA 
tuition and service fee waivers exceeding $5,250 per calendar year may be 
excluded from taxable income if the GA or PGA appointment meets certain 
criteria.  

Students receiving waivers associated with GA or PGA appointments will 
receive information from the Payroll Office to assist in determining what 
portion, if any, of the waiver should be considered taxable income and 
whether or not it will be necessary to withhold additional taxes from these 
students' paychecks.  GAs and PGAs may be exempt if:

-The value of the GA or PGA waiver does not exceed $5,250 for the calendar 
year, or
-The value of the waiver exceeds $5,250 for the calendar year and there is 
a concurrent TA or RA appointment that is half or more of the total 
percentage appointment (for example, if you have a combined appointment of 
30% that includes a 15% RA appointment, then you should not receive this 
information), or
-The GA or PGA has a concurrent qualified fellowship appointment as defined 
by IRS Publication 520, Scholarships and Fellowships, which is posted at 
http://www.irs.gov/pub/irs-pdf/p520.pdf.

Information about eligibility and restrictions for graduate-level tuition 
and service fee waivers may be found in Rule 52 of the Code of Policies and 
Regulations Applying to All Students 
(http://www.uiuc.edu/admin_manual/code/) and the Graduate College's "Policy 
on Selection of Graduate Student Assistants" 
(http://www.grad.uiuc.edu/Policies/SelectionOfGraduateStudentAssistants.htm
l).

Information about the University's Educational Assistance Plan will be 
included in subsequent editions of A Handbook for Graduate Students and 
Advisers.

Questions about the taxability of waivers should be directed to the Payroll 
Office at (217) 333-9131 or 100A North Henry Administration Building, 506 
South Wright Street, MC-318, Urbana, Illinois 61801.

This mailing approved by:
The Office of the Provost & Vice Chancellor for Academic Affairs

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