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[Emeriti-faculty] Avoiding the 8% benefits "tax" on summer RA positions




Friends,

Most of you are probably aware that when a graduate student receives RA support from a grant during the summer, the grant is normally charged 8% of the student's stipend, and Social Security and Medicare taxes are deducted from the student's pay.  It turns out that both the extra charge to the grant and the deductions from the student's pay can be avoided, if the student is working on a project that directly benefits his/her progress towards the degree

Many thanks to Shannon for figuring out how to invoke the exemption.  As best she's been able to determine, here's what you have to do:

Instructions for ensuring no benefit charges for graduate students working over the summer on projects directly benefiting their degrees (ie thesis work):

1.      Faculty member should identify students who fall into this category.

2.      Faculty member should inform students that they must register for summer class: 406-RA – no fees should be incurred unless student also signs up for other regular summer classes.

3.      Faculty member should email Shannon the names of these students by mid-May to ensure time for processing.

4.      Shannon will verify students have registered for class and will email confirmed list to Graduate Student Office.

5.      Graduate Student Office will follow up with HR to request HR code these students as active & full-time thus avoiding benefits charges.

6.      Shannon will monitor expenses and follow up with HR if problems arise.


Since this involves coordination between the academic and personnel arms of the University, which often don't speak the same language, there may be some glitches.  Let Shannon know if you run into any.

Again, thanks are due to Shannon for figuring this out -- it took a lot of phone calls and emails.

Roger


 



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