Using Education Benefits? Do you know they may be taxable?

Posted By: HR avatar

Published to Newsletter on Jun 02, 2025

Are you a benefits-eligible employee planning to utilize UNM’s Tuition Remission or Dependent Education Scholarship in 2025? If so, it’s important to understand how the taxability of these benefits affects your income and paycheck prior to enrolling in courses or utilizing benefits for yourself and your dependents.

The value of Education Benefits received must be included in your taxable income and subsequently taxed for the following circumstances:

  • Tuition Remission used for health, fitness, and/or personal enrichment programs requires the full value of tuition waived to be taxable to you.
  • Amounts of tuition and mandatory student fees paid during the calendar year for graduate courses that exceed the published IRS maximum amount of $5,250 will be added to your wages as taxable income.
  • The value of the Tuition Remission benefit taken by spouses for graduate credit and any courses taken by domestic partners is considered taxable income to you.
  • The value of Dependent Education Scholarship awarded once per semester is considered taxable income for tuition paid for:
  • -Domestic Partners
  • -Dependents who are married
  • -Dependents who are age 24 or older at any time in the tax year that the benefit is received
  • -Dependents who are not claimed as a dependent on an income tax return

If the benefit you received is determined to be taxable, the taxable amount will be added to your pay as additional taxable income, resulting in reduced net income per adjusted payroll(s). The amount of tax that will be withheld depends on your individual tax status (from your W-4).

Included here is the weblink link to the UNM Payroll calculator to assist you with the additional tax calculation: https://login.unm.edu/cas/login?service=https%3a%2f%2fmyapps.unm.edu%2fpayroll-calculator%2f

For more on taxability: UNM Policy 3700: Education Benefits Sections 3.1.1, 3.9, and 4.4.

Please visit the Tuition Remission and Dependent Education webpages for more information on Education Benefits.

Questions? Contact Benefits & Employee Wellness at 505-277-6947(MyHR) or email hrbenefits@unm.edu. 


Tags: