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New Mexico State University

New Mexico State University

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Employer-sponsored graduate courses may be tax-free

Graduate courses paid for by employers will no longer be taxable if students are pursuing a graduate degree, according to James McDonough, vice president for business and finance at New Mexico State University.


tax relief act signed recently by President George W. Bush will exempt employer-paid tuition for all graduate courses leading to advanced academic or professional degrees, effective Dec. 31, 2001, McDonough said. Any other graduate-level course taken that is not in pursuit of a degree would be classified as a hobby course and would be taxable, he added.

The new legislation means that the tuition waiver for NMSU employees, who may take up to four credits per semester, will no longer be taxable as long as employees are in pursuit of an advanced academic or professional degree.

The act also exempts other employer-covered expenses such as fees, books, supplies and equipment, but does not include payment for tools or supplies that may be retained by the employee at the end of the course. It also does not exempt meals, lodging or transportation expenses paid for by the employer.

For more information on the impact of the new tax relief act, individuals can call Robert Scaling, director of university Treasury Services, 646-4019.