Harvard recently notified HUCTW leaders that in order to ensure compliance with current IRS policies, the University will begin withholding tax on Tuition Assistance Program (TAP) benefits for classes that meet all three of the following three criteria (1) If the classes are taken for graduate credit (courses taken for undergraduate credit or for no credit are not taxable); and (2) If classes do not meet the IRS standard of job-relatedness; and (3) If the total tuition benefit used for such courses during the calendar year exceeds $5,250 (only amounts over $5,250 are taxable).
You may be able to avoid owing tax on your class up front, if you use Harvard’s Graduate Credit TAP Form to make an argument that your course is job-related in the “Job-Relatedness Attestation” section of the form.
- MAKING A CASE FOR JOB-RELATEDNESS: In order for a course to be considered “job-related,” it does not need to be related to your core job duties, it just needs to be related to some aspect of your job. For example, if you are a faculty assistant and you are taking a class in web design, that class may not related to your core duties. However, it may provide useful skills to help you maintain the website that you update regularly for one of your faculty — and that is where you could focus your job-relatedness argument on the form. Another example: if you are an executive education program coordinator and you are taking a writing course, this class is may not related to your core duties, but it may assist you in writing the monthly newsletter updates on program alumni that you sometimes contribute to the department newsletter. If you are in a degree program, you should consider how the job-relatedness standard applies to each individual course. For example, if you are doing a degree in psychology, you may not be able to make the case that every course you take for your program can help you in your current job, but you may be able to make a case that some of your courses could help you in your current job. If you are making a job-relatedness argument, you will want to check “yes” in the section that asks whether your course meets the IRS standard for job-relatedness. The job-relatedness argument you make on the form can be short and informal.
After you have completed the job-relatedness section of the form, you will want to finish filling out the rest of the form, and then before you hit submit, print a copy of the form for your supervisor to sign. You will be submitting the form in two ways (1) as a printed and signed copy and (2) as an electronic, unsigned submission. The form itself explains this at the bottom. If you are taking a class at the Extension School, you will be submitting your printed/signed form (by email, online upload, or fax) directly to Benefit Strategies (BenStrat). If you are taking a class at any other Harvard school, you will be submitting your printed/signed form (by email, fax, or in person) to your school’s Registrar’s Office, and they will forward a copy onto BenStrat. Save some form of dated record that you submitted the form on time.
- UNABLE TO MAKE A CASE FOR JOB-RELATEDNESS: If your course is not job-related (or if you are not able to get your supervisor’s signature on your TAP form), you can apply for 80% reimbursement of any tax you owe on Harvard courses for this semester (spring 2020) using the Transitional TAP Fund (TTF). You can find the TTF reimbursement form on Benefit Strategies website: https://www.benstrat.com/harvard/. You can learn more about how the Transitional TAP Fund works on the Q&A sheet created by Harvard. The 80% tax reimbursement is for the spring 2020 semester only.
Even if your course is not job-related, you still need to fill out the TAP form if you are using TAP, but under the section that asks whether your course meets the IRS standard for job-relatedness, you check “no.” Even if you missed the TAP form deadline, you should still submit your TAP form as soon as possible. You can’t apply for the tax reimbursement (TTF) program unless you submit a TAP form first.
Please email or call us at firstname.lastname@example.org or email@example.com or 617-661-8289 if you have any questions.
The HUCTW office will try to answer your questions about the new TAP changes as best we can, however please note that this new TAP process is not a HUCTW process; this is a Harvard Benefits Office process. We didn’t create the policies or set the deadlines. So, if you would like definitive confirmation about deadlines, requirements, taxes-owed, etc, you should contact that Harvard Benefits Office (617-496-4001, firstname.lastname@example.org).