Benefit Taxation
Educational Benefits
Educational Benefits are subject to withholding taxes under regulations of the Internal Revenue Service (IRS) for the following:
- Non tax dependent children enrolled in undergraduate courses
- Children or spouse enrolled in graduate level courses
- Domestic Partners enrolled in both undergraduate and graduate level courses
- Employees enrolled in graduate level courses will be taxed for tuition benefits exceeding $5,250 in a calendar year
Taxable waivers are reported to the Payroll Office, where taxes will be deducted from the employee's pay according to the tax withholding schedule.
Education Below the Graduate Level
From IRS Pub 970
If you receive a tuition reduction for education below the graduate level (including primary and secondary school), it is a qualified tuition reduction, and therefore tax free, only if your relationship to the educational institution providing the benefit is described below.
- You are an employee of the eligible educational institution.
- You were an employee of the eligible educational institution, but you retired or left on disability.
- You are a widow or widower of an individual who died while an employee of the eligible educational institution or who retired or left on disability.
- You are the dependent child or spouse of an individual described in (1) through (3) above.
Child of deceased parents.
For purposes of the qualified tuition reduction, a child is a dependent child if the child is under age 25 and both parents have died.
Child of divorced parents.
For purposes of the qualified tuition reduction, a dependent child of divorced parents is treated as the dependent of both parents.
Graduate Education
A tuition reduction you receive for graduate education is qualified, and therefore tax free, if both of the following requirements are met.
- It is provided by an eligible educational institution.
- You are a graduate student who performs teaching or research activities for the educational institution.
You must include in income any other tuition reductions for graduate education that you receive.
Semi-Monthly Tax Withholding Schedule
- Summer: 8/15, 8/31, 9/15, 9/30
- Fall Semester: 10/13, 10/31, 11/14, 11/28
- Spring Semester: 2/15, 2/28, 3/15, 3/31
Bi-Weekly Tax Withholding Schedule
- Summer: 8/9, 8/23, 9/6, 9/20
- Fall Semester: 10/4, 10/18, 11/1, 11/15
- Spring Semester: 2/7, 2/21, 3/6, 3/20
The withholding schedule for those on the bi-weekly payroll can also be found on page 2 of the bi-weekly calendar found on the Payroll Schedules page.
Flexible Spending Accounts
A Flexible Spending Account (FSA) allows you to save on your taxes while paying for certain medical bills or day care expenses. When you enroll in an FSA, you chose an amount to be deducted from each paycheck. The payroll deduction is taken from your pay before federal and state income taxes are calculated and deducted, which means you actually reduce the amount of taxes you pay. Learn more about the benefit on the Flexible Spending Accounts page.
1095-C Employer-Provided Health Insurance Offer and Coverage
Each year the university provides employees with W2 tax forms for use in filing their tax return. Under the Affordable Care Act, the university must also provide form 1095C to certain employees to assist them with answering health care related questions when filing tax returns. Employees who will receive the form include those who:
- Were enrolled in health care coverage from Ohio University at any point during the year
- Worked an average of 30 or more hours per week or were considered a full- time employee and were offered health care.
The university mails 1095C forms to employee home addresses in early March.
When filing your tax return, you may be required to indicate if you had qualifying health care coverage for you and any covered dependents (if filing jointly) by checking a box on line 61 of IRS Form 1040 or by completing IRS form 8965. The 1095C form reports the months you and any family members were offered and covered under the university’s health plans. Employees do not submit the forms when filing their tax return.
Forms are not available for download from My Personal Information. Contact benefits@ohio.edu with questions.
Taxable Uniform Process
In some cases uniforms or clothing provided to an employee is a taxable benefit. Find more information about the taxation of uniforms on the Taxable Uniform Process page.
Domestic Partner Benefits
For employees enrolling domestic partners and/or their domestic partner’s dependents in University health plans, the incremental fair market value (FMV) of the coverage provided is taxable income to the employee UNLESS the employee certifies that their domestic partner is a tax dependent.
Domestic Partner Taxable Health Plan Benefit Schedule Examples
The tables below provide examples of the estimated additional taxes deducted per pay for employees covering a domestic partner and/or a dependent of a domestic partner. Table 1 provides amounts for one dependent and Table 2 for more than one dependent. View the Tax Information Sheet for Domestic Partners [PDF] for further details regarding this tax.
| TABLE 1: Taxable Health Plan Benefit Schedule Example- ONE DEPENDENT | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Medical Coverage Level: EE + One (Domestic Partner OR a child of a Domestic Partner) Dental Coverage Level: EE + One (Domestic Partner OR a child of a Domestic Partner) Domestic Partner Benefit Tax Status: Taxable | |||||||||||||
| # of Pay Periods in Calendar Year | 18 | 24 | 26 | 26 | Tax Assumptions | ||||||||
| *FMV of Taxable Medical Coverage/ per Pay | $687.33 | $515.50 | $475.84 | $558.36 |
| ||||||||
| *FMV of Taxable Dental Coverage/ per Pay | $20.24 | $15.18 | $14.01 | $12.37 |
| ||||||||
| Taxable Coverage/ per Pay Period | $707.57 | $530.68 | $489.85 | $570.74 |
| ||||||||
| Employee Federal Taxes/ Pay Period | $155.66 | $116.75 | $107.77 | $125.56 | 22% | ||||||||
| Employee State Taxes/ Pay Period | $24.76 | $18.57 | $17.14 | $19.98 | 3.5% | ||||||||
| Employee Local Taxes/ Pay Period | $11.67 | $8.76 | $8.08 | $9.42 | 1.65% | ||||||||
| Employee School District Taxes/ Pay Period | $7.08 | $5.31 | $4.90 | $5.71 | 1% | ||||||||
| Medicare Taxes/ Pay Period | $10.26 | $7.69 | $7.10 | $8.28 | 1.45% | ||||||||
| Total estimated additional taxes per pay in 2024 | $209.44 | $157.08 | $145.00 | $168.94 | |||||||||
*FMV= Fair Market Value
Please note: the individual tax rate may vary from the estimated taxes above based on Individual's tax bracket.
| TABLE 2: Taxable Health Plan Benefit Schedule Example- MORE THAN ONE DEPENDENT | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Medical Coverage Level: EE + Family (Domestic Partner plus at least one dependent child of a Domestic Partner) Dental Coverage Level: EE + One (Domestic Partner plus at least one dependent child of a Domestic Partner) Domestic Partner Benefit Tax Status: Taxable | |||||||||||||
| # of Pay Periods in Calendar Year | 18 | 24 | 26 | 26 | Tax Assumptions | ||||||||
| *FMV of Taxable Medical Coverage/ per Pay | $896.00 | $672.00 | $620.31 | $775.38 |
| ||||||||
| *FMV of Taxable Dental Coverage/ per Pay | $37.33 | $28.00 | $25.85 | $25.85 |
| ||||||||
| Taxable Coverage/ per Pay Period | $933.33 | $700.00 | $646.15 | $801.23 |
| ||||||||
| Employee Federal Taxes/ Pay Period | $205.33 | $154.00 | $142.15 | $176.27 | 22% | ||||||||
| Employee State Taxes/ Pay Period | $32.67 | $24.50 | $22.62 | $28.04 | 3.5% | ||||||||
| Employee Local Taxes/ Pay Period | $15.40 | $11.55 | $10.66 | $13.22 | 1.65% | ||||||||
| Employee School District Taxes/ Pay Period | $9.33 | $7.00 | $6.46 | $8.01 | 1% | ||||||||
| Medicare Taxes/ Pay Period | $13.53 | $10.15 | $9.37 | $11.62 | 1.45% | ||||||||
| Total estimated additional taxes per pay in 2024 | $276.27 | $207.20 | $191.26 | $237.16 | |||||||||
*FMV= Fair Market Value
Please note: the individual tax rate may vary from the estimated taxes above based on Individual's tax bracket.