TAP Administration Process and Taxes for Graduate Courses
Per IRS standards, TAP benefits for courses that meet all three criteria below will be treated as taxable income:
- Taken for graduate credit (courses taken for undergraduate credit or for no credit are not taxable);
- Not related to your current job duties (per the IRS standard); and
- The total tuition benefits for such courses during a calendar year exceeds $5,250.
In such cases, amounts above $5,250 will be reported as income to the employee on the W-2 and the University will withhold taxes on this amount from employee’s pay (employees may choose to pay the full amount of taxes to Harvard Payroll in lieu of withholding).
TAP benefits are not taxable if a course is job-related per the IRS standard. Employees may designate a course as job-related when enrolling using a graduate-credit TAP form, by describing the job-related education that will be provided; the completed form must be approved by the supervisor/manager by the semester's TAP form deadline.
You can learn more in the Questions and Answers Regarding TAP Process Change. Please refer to the TAP/TRP booklet for the full rules and eligibility.