With this year’s Educational Assistance, or “Ed Assist,” support staff benefit resetting with the start of the fall semester, now’s a perfect time to refresh your Ed Assist knowledge and take advantage of this opportunity for your learning and development. Here are a few important reminders regarding this benefit.
Credit and Non-Credit Options
You may receive financial assistance for credit and non-credit courses, including training, seminars, workshops, conferences, or other educational opportunities. Use this benefit to enhance your professional skill set or help you reach Performance Excellence goals.
For non-credit courses, like professional development courses available through HR, support staff employees may have up to $900 per year to use toward course registration fees depending on their union contract. The course must be considered job-related and from an approved institution/program to receive assistance.
You may receive up to 14 credits per academic year for credit courses. Your level of financial assistance is determined by your union group, whether you’re taking a graduate or undergraduate course, and where you’re taking the course (MSU or another university). The course must be considered job-related, degree-related, or career/professional development-related.
Taxation Information for Graduate-Level, Degree-Related Coursework
When using Educational Assistance funds toward graduate-level, degree-related classes for credit, it’s important to remember and plan for IRS tax exemption rules. The Internal Revenue Code (IRC) provides up to $5,250 in exemption per tax (calendar) year for graduate-level, degree-related courses reimbursed/waived through employer educational assistance programs, like the one at MSU. Any amount of the benefit over $5,250 for degree-related, graduate-level courses is considered taxable income by the IRS.
If you use Ed Assist benefits for graduate-level, degree-related courses for credit over the $5,250 exemption amount, appropriate tax withholding will be made, and the amount will be added to your gross wages. If there is a tax liability, the deductions must be completed within the same calendar year. If this tax situation applies to your Ed Assist usage, you will receive a notification via email in the fall, typically around September. This notification will indicate the amount of Educational Assistance received in the calendar year, the taxable amount, and which paycheck withdrawals will occur to cover the outstanding tax liability.
Note: This tax liability, dictated by the IRS, applies ONLY to any Ed Assist benefit usage over the $5,250 limit when applied to graduate-level, degree-related courses for credit. For example, if you received $6,250 in eligible Ed Assist benefits in a year, you would only be taxed on the $1,000 over the exemption limit and owe a percentage of that $1,000 as your tax liability.
Find detailed information about Educational Assistance – including how to apply – on the HR website. Contact Organization and Professional Development at avphr.hrdmail@msu.edu with questions.