Colleagues,
As most of you know, the tuition waiver associated with appointment as a graduate assistant is currently not subject to Federal income tax. Under the tax reform plan that recently passed in the US House of Representatives, however, the tuition waiver would be treated as taxable income, obligating the University to withhold a substantial amount of additional tax from bi-weekly stipends that graduate assistants receive. The version of tax reform that passed in a Senate committee does not include this change. If the Senate passes a reform plan, the fate of this proposed change may be determined in conference committee.
The impact of the change will differ substantially from individual to individual, depending personal tax circumstances (for example, whether you are married or single, whether you have other sources of income, whether you itemize or take the standard deduction) and the value of your waiver. You should consult your person tax advisor to understand exactly how this change might affect you. However, under the tax brackets implemented by the House plan, most single students will find that they can estimate the potential cost of the change by multiplying 17% times the value of the waiver. For example, a graduate assistant who receives an out-of-state tuition waiver of $36,000 would owe approximately $6,100 in additional state and federal tax beyond what he or she currently owes.
The University is keenly aware that this increase would place a substantial financial burden on graduate assistants. Representatives of the University are in close communication with Connecticut’s representatives in Congress, and our understanding is that they are unanimously opposed to this change. In addition, the University is working with national groups that represent the interests of higher education to reinforce their efforts explaining the damage this change will cause to higher education if it is adopted. These groups include the American Council on Education, the Association of Public and Land-grant Universities, the National Association of College and University Business Officers, and the Council of Graduate Schools.
For those of you who are out-of-state residents, I suggest that you contact the members of Congress who represent you and tell them how the House-passed version of this legislation would affect you as students.
Kent Holsinger
For more information, contact: The Graduate School at gradschool@uconn.edu