EMPLOYEE BENEFITS

Taxability

MIT will determine whether or not the benefits you receive from the Tuition Assistance Plan are taxable based on the provisions of the Internal Revenue Code and the information that you provide in your online Tuition Assistance Account or on a paper Tuition Assistance Request Form. The sections of the tax code that govern whether or not MIT must tax a reimbursement are subject to change. Please note that undergraduate courses and fees that are covered under the Tuition Assistance Plan will continue to be nontaxable to the extent provided under the applicable tax laws.

Reimbursements up to $5,250 During a Calendar Year

Effective January 1, 2002, the tax code provision that excludes some tuition reimbursements up to $5,250 during a calendar year from federal taxes, Section 127 of the Internal Revenue Code, was changed to also exclude from taxation reimbursements for graduate-level courses up to $5,250 during a calendar year. This change applied to graduate-level courses that began on or after January 1, 2002 and included the cost of tuition and fees that are covered under the Tuition Assistance Plan. In addition, Massachusetts changed its tax laws that pertain to tuition reimbursements for graduate-level courses up to $5,250 during a calendar year retroactive to January 1, 2005.

MIT Special Student Course Reimbursements

According to the IRS, employees who take graduate-level courses as a Special Student at MIT (or such courses along with graduate-level courses at another institution) and receive employer-provided tuition assistance in excess of $5,250 during a calendar year are subject to taxation on the amount above $5,250. The $5,250 limit applies to graduate Special Student courses at MIT whether or not the courses are job-related.