# Question about taxation of the tuition fee waiver **URL:** \ **Category:** Factual Questions\ **Created:** [November 17, 2017, 8:37pm UTC](https://boards.straightdope.com/t/question-about-taxation-of-the-tuition-fee-waiver/801904 "2017-11-17T20:37:50Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [November 17, 2017, 8:37pm UTC](https://boards.straightdope.com/t/question-about-taxation-of-the-tuition-fee-waiver/801904/1 "2017-11-17T20:37:50Z")
Back when I was living in the US, there was a rule that if your employment required you to take courses, then your tuition payments were deductible as an employment expense. If this rule is still in effect, then the graduate student who gets a tuition waiver and this is added to his income, then he can deduct it since clearly going to school is automatically a requirement to continued employment as a research assistant. Have the rules changed or am I missing something? ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [November 17, 2017, 10:10pm UTC](https://boards.straightdope.com/t/question-about-taxation-of-the-tuition-fee-waiver/801904/2 "2017-11-17T22:10:06Z")
**Alley Dweller** did all the leg work on that question and [explains it here](http://boards.straightdope.com/sdmb/showpost.php?p=20602214&postcount=17). The current law doesn’t necessarily provide a tax deduction, as the [IRS explains here](https://www.irs.gov/taxtopics/tc513). > [@](#): > > To be deductible, your expenses must be for education that (1) maintains or improves your job skills or (2) that your employer or a law requires to keep your salary, status, or job. **However, even if the education meets either of these tests** , the education can’t be part of a program that will qualify you for a new trade or business or that you need to meet the minimal educational requirements of your trade or business. (Emphasis added) That leaves a big question. If I’m a graduate teaching/research assistant, is the Ph.D that I’m working toward “a new trade or business”? The current law cuts through that issue by simply declaring that tuition waivers aren’t taxable income, period. The proposed law would repeal that. ---
**Author:** ![Leo\_Bloom](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/leo_bloom/32/10377_2.png) [@Leo\_Bloom](https://boards.straightdope.com/u/Leo_Bloom)\ **Post date:** [November 17, 2017, 11:54pm UTC](https://boards.straightdope.com/t/question-about-taxation-of-the-tuition-fee-waiver/801904/3 "2017-11-17T23:54:49Z")
**Kunilou** , reading OP I came up with the same question, out of what even I think is pleasant but no-win reasoning. FWIW, I received a full tuition and board as well as a sizable annual income (for a student certainly) for my entire graduate career, pre-MA to Ph.D. (Thank you US taxpayers and the Dept. of Education!) The stipend was taxed. ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [November 18, 2017, 1:38am UTC](https://boards.straightdope.com/t/question-about-taxation-of-the-tuition-fee-waiver/801904/4 "2017-11-18T01:38:18Z")
I might mention that my DIL received a full scholarship for her last two years of med school from the public health service in return for a commitment to give two years of public service. It was considered a prepayment for the public health service employment and every cent of that scholarship was fully taxed. But my question is answered. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [November 21, 2017, 2:59am UTC](https://boards.straightdope.com/t/question-about-taxation-of-the-tuition-fee-waiver/801904/5 "2017-11-21T02:59:58Z")
> **[The Republican War on College](https://www.theatlantic.com/business/archive/2017/11/republican-college/546308/)** > > For the cost of cutting corporate income taxes, the U.S. could provide universal pre-K and make tuition free at public colleges for nonaffluent students. An interesting article that suggests at the very least it’s benign neglect, aimed at the fact that college grads tend to vote Democratic and also because the states need the money for health care - plus the bill effectively raises the tax rate for blue states and makes it harder for them to raise taxes, so services like universities and health care will suffer more…