employee tuition benefit and athletic scholarship

[kexman]

Asking for a friend.

Our employer offers a tuition benefit to employee children. Similar to Duke's benefit you can take it to any school. My friends daughter is being recruited for softball which is an equivalency sport (12 scholarship limit for softball). They are running into problems that the employee benefit will count against their scholarship limit and they don't currently have a scholarship to give. She can't even walk on since the tuition benefit counts as a scholarship and affecting the schools number. There are rules on academic scholarships (to stop a school from giving academic scholarships to get around scholarship limits). Does an employee tuition benefit (from an outside university) really count the same as an academic scholarship as far as the NCAA counts? I don't think it really should, but who knows with the NCAA.
Any thoughts...must be some NCAA recruiting gurus on this forum. I assume the school knows what it is talking about, but I trust DBR more since this is probably somewhat unique:)

thanks in advance

[OZZIE4DUKE]

Asking for a friend.

Our employer offers a tuition benefit to employee children. Similar to Duke's benefit you can take it to any school. My friends daughter is being recruited for softball which is an equivalency sport (12 scholarship limit for softball). They are running into problems that the employee benefit will count against their scholarship limit and they don't currently have a scholarship to give. She can't even walk on since the tuition benefit counts as a scholarship and affecting the schools number. There are rules on academic scholarships (to stop a school from giving academic scholarships to get around scholarship limits). Does an employee tuition benefit (from an outside university) really count the same as an academic scholarship as far as the NCAA counts? I don't think it really should, but who knows with the NCAA.
Any thoughts...must be some NCAA recruiting gurus on this forum. I assume the school knows what it is talking about, but I trust DBR more since this is probably somewhat unique:)

thanks in advance
The NCAA has absolutely no idea how to deal with a student athlete that actually wants to go to class and get an education. http://www.crazietalk.net/ourhouse/images/smilies/devil9f.gif

[grad_devil]

What division?

It wouldn't count against the team's scholarship limit for D2, so I'm assuming the school is a D1 school?

[PackMan97]

Asking for a friend.

Our employer offers a tuition benefit to employee children. Similar to Duke's benefit you can take it to any school. My friends daughter is being recruited for softball which is an equivalency sport (12 scholarship limit for softball). They are running into problems that the employee benefit will count against their scholarship limit and they don't currently have a scholarship to give. She can't even walk on since the tuition benefit counts as a scholarship and affecting the schools number. There are rules on academic scholarships (to stop a school from giving academic scholarships to get around scholarship limits). Does an employee tuition benefit (from an outside university) really count the same as an academic scholarship as far as the NCAA counts? I don't think it really should, but who knows with the NCAA.
Any thoughts...must be some NCAA recruiting gurus on this forum. I assume the school knows what it is talking about, but I trust DBR more since this is probably somewhat unique:)

thanks in advance

I'm pretty sure that you can just tell the NCAA that regular students get this employee benefit as well, so it's all good.

[smvalkyries]

I wish someone would correct me if I am wrong but I believe that employee dependent scholarship benefits are fully taxable at least for Federal purposes. If that is true you can probably work the issue out with your HR department to permit you to pay the tuition directly and have your company reimburse you less the requisite withholding. That way the issue of scholarship never reaches the school in question. That should solve the problem with no added cost to you. All this assumes your company reports the value of the benefit on your W-2 and I am correct about the tax consequences of the scholly. Also you might need to check your State tax consequences since not all states treat employee dependent fringe benefits the same way.
My understanding is that grad school schollies are treated differently with the first $5,250 or so excluded and the balance taxable. Enployee paid education expenses are also treated differently and usually non-taxable if they would be deductible to you. Of course her playing softball would make even academic schollies taxable if she elected to take modelling jobs on the side or sell her likeness rights to Topps baseball cards for women (assuming Topps is required under the Warren sexual equality bill to start issuing women's softball cards at compensation equal to men's baseball cards). Good luck resolving your problem. On a personnal note I have never seen an IRS agent tax the value of any kind of college scholarship but I am told that in some areas of the country it is quite common??

[sagegrouse]

I wish someone would correct me if I am wrong but I believe that employee dependent scholarship benefits are fully taxable at least for Federal purposes. If that is true you can probably work the issue out with your HR department to permit you to pay the tuition directly and have your company reimburse you less the requisite withholding. That way the issue of scholarship never reaches the school in question. That should solve the problem with no added cost to you. All this assumes your company reports the value of the benefit on your W-2 and I am correct about the tax consequences of the scholly. Also you might need to check your State tax consequences since not all states treat employee dependent fringe benefits the same way.
My understanding is that grad school schollies are treated differently with the first $5,250 or so excluded and the balance taxable. Enployee paid education expenses are also treated differently and usually non-taxable if they would be deductible to you. Of course her playing softball would make even academic schollies taxable if she elected to take modelling jobs on the side or sell her likeness rights to Topps baseball cards for women (assuming Topps is required under the Warren sexual equality bill to start issuing women's softball cards at compensation equal to men's baseball cards). Good luck resolving your problem. On a personnal note I have never seen an IRS agent tax the value of any kind of college scholarship but I am told that in some areas of the country it is quite common??

I dunno if this is wrong or not but tuition expense as an employee benefit is taxed at amounts above $5,250, according to several sources. Here's one. (https://study.com/academy/popular/is-tuition-reimbursement-taxable.html)

The NCAA scholarship limit seems like an entirely different matter. You might contact other schools NCAA compliance departments to get a read-out. I assume that your employer is not a college or university. If it were, there may be a difference if the student is enrolled at the same institution receiving the tuition benefit as opposed to a different institution. I.e., Duke money being all the same, academic scholarship or not.

[jv001]

Don't know about other universities, but the NCAA doesn't require rules to be followed at UNcheat. :cool:
GoDuke!

[Bike4Fun]

I dunno if this is wrong or not but tuition expense as an employee benefit is taxed at amounts above $5,250, according to several sources. Here's one. (https://study.com/academy/popular/is-tuition-reimbursement-taxable.html)

The NCAA scholarship limit seems like an entirely different matter. You might contact other schools NCAA compliance departments to get a read-out. I assume that your employer is not a college or university. If it were, there may be a difference if the student is enrolled at the same institution receiving the tuition benefit as opposed to a different institution. I.e., Duke money being all the same, academic scholarship or not.

I didn't recall this being a problem for my daughter at Duke who was an athlete on scholarship and had the Duke tuition benefit. The link to taxability in the post, I think refers to when a parent is reimbursed directly for tuition paid. The Duke tuition benefit does not pass through the child or parent, but goes directly to the University. Thus,

The Duke tuition benefit is NOT taxable. From the Duke Benefits manual:

"The benefit is not considered taxable income for most eligible employees. However, if your child does not qualify as a dependent in accordance with the Working Families Tax Relief Act (“WFTRA”), then the benefit will be considered taxable income to you."

If this grant applied to the athletic scholarship available to the team, I was totally unaware of that at the time. My strong hunch is that it does not apply to the team allocation.

[kexman]

I dunno if this is wrong or not but tuition expense as an employee benefit is taxed at amounts above $5,250, according to several sources. Here's one. (https://study.com/academy/popular/is-tuition-reimbursement-taxable.html)

The NCAA scholarship limit seems like an entirely different matter. You might contact other schools NCAA compliance departments to get a read-out. I assume that your employer is not a college or university. If it were, there may be a difference if the student is enrolled at the same institution receiving the tuition benefit as opposed to a different institution. I.e., Duke money being all the same, academic scholarship or not.

Thanks for the comments. A couple of follow-ups on points made.

We work at a university, but the tuition benefit would be used at a different school in a power 5 conference.

I don't believe our tuition benefit is taxed. I still have 10 years to worry about that. I assume I would have heard people complaining about their tax bills if it was taxed. It is basically just likes Duke's benefit.

She is a junior, but currently they have more scholarships out than they have space. The parents were not that concerned about the scholarship since tuition will be paid by the employee benefit. However, since the employee benefit counts as a "scholarship" against the school's allotted 12 spots, they can't let her even walk on at this point. Seems kind of misguided.

Anyway, just thought I would throw it out there since I knew that Duke had a similar tuition benefit and DBR knows all. thanks!!!

[CrazyNotCrazie]

Thanks for the comments. A couple of follow-ups on points made.

We work at a university, but the tuition benefit would be used at a different school in a power 5 conference.

I don't believe our tuition benefit is taxed. I still have 10 years to worry about that. I assume I would have heard people complaining about their tax bills if it was taxed. It is basically just likes Duke's benefit.

She is a junior, but currently they have more scholarships out than they have space. The parents were not that concerned about the scholarship since tuition will be paid by the employee benefit. However, since the employee benefit counts as a "scholarship" against the school's allotted 12 spots, they can't let her even walk on at this point. Seems kind of misguided.

Anyway, just thought I would throw it out there since I knew that Duke had a similar tuition benefit and DBR knows all. thanks!!!

I assume Duke's program does not apply to grandchildren or else Coach K and his grandson would be a great test case (though Coach K can easily afford to decline the assistance and write the check). Also, I believe the men's lax team has a few players currently on the squad who are the children of Duke coaches - CJ Carpenter's mom is the volleyball coach, and Owen Caputo's dad is the assistant men's lax coach. And I'm sure there are plenty of other examples.

[Bike4Fun]

I assume Duke's program does not apply to grandchildren.
Only children, only undergraduate, max 2 children (so if both spouses work for the university then 4 children), max 8 semesters/child. This is not a benefit for just faculty. Only children, only undergraduate, max 2 children (so if both spouses work for Duke then 4 children), max 8 semesters/child. There is a deductible pegged to in-state university tuitions, so can’t be used at UNC or NC State or any other UNC system school.

I can’t see how an employer benefit would affect the number of scholarships for a team, and the inability to even walk-on just seems unlikely.

I can’t see how an employee benefit would affect the number of scholarships for a team, and the inability to even walk-on just seems unlikely. The employer tuition grant when paid directly to the school should be permissible aid. It is not the same as a scholarship to the student. If I were your friend, I’d ask for a different person to review the situation because it is possible that someone doesn’t understand the nuance of the grant.

[DU82]

Thanks for the comments. A couple of follow-ups on points made.

We work at a university, but the tuition benefit would be used at a different school in a power 5 conference.

I don't believe our tuition benefit is taxed. I still have 10 years to worry about that. I assume I would have heard people complaining about their tax bills if it was taxed. It is basically just likes Duke's benefit.

She is a junior, but currently they have more scholarships out than they have space. The parents were not that concerned about the scholarship since tuition will be paid by the employee benefit. However, since the employee benefit counts as a "scholarship" against the school's allotted 12 spots, they can't let her even walk on at this point. Seems kind of misguided.

Anyway, just thought I would throw it out there since I knew that Duke had a similar tuition benefit and DBR knows all. thanks!!!

Why don’t you call the source, the NCAA?

[Neals384]

Only children, only undergraduate, max 2 children (so if both spouses work for the university then 4 children), max 8 semesters/child. This is not a benefit for just faculty. Only children, only undergraduate, max 2 children (so if both spouses work for Duke then 4 children), max 8 semesters/child. There is a deductible pegged to in-state university tuitions, so can’t be used at UNC or NC State or any other UNC system school.

I can’t see how an employer benefit would affect the number of scholarships for a team, and the inability to even walk-on just seems unlikely.

I can’t see how an employee benefit would affect the number of scholarships for a team, and the inability to even walk-on just seems unlikely. The employer tuition grant when paid directly to the school should be permissible aid. It is not the same as a scholarship to the student. If I were your friend, I’d ask for a different person to review the situation because it is possible that someone doesn’t understand the nuance of the grant.

best rule ever!