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Qualified Tuition Reduction FAQs

Basic Information

What is Qualified Tuition Reduction (QTR)?

Qualified Tuition Reduction (QTR) is a benefit provided to all eligible employees, affiliated participants, and their spouses and dependents. It allows full-benefits-eligible employees to take courses at any of the three Arizona public universities (University of Arizona, Arizona State University, and Northern Arizona University) at at substantially reduced tuition rates.

How much is tuition when QTR is applied?

Visit the Bursar's Office website and select “Tuition Fees” for tuition costs when using the QTR.
http://www.bursar.arizona.edu/

How long will it take for the QTR to be posted to the student's account?

If the student is registered for classes and tuition has posted, the tuition reduction will post once it has been entered by the Bursar’s Office. The student will be able to see it in his/her student account in UAccess Student.

How many courses a semester can I take while using the QTR benefit?

For employees and their spouses or domestic partners, QTR will be applied to up to 6 credit hours during Summer and Winter sessions and up to 9 credit hours during Spring and Fall semesters. The full tuition amount will be applied to any enrolled credits over the applied limitations.

Eligible dependent children who register for 1 or more credit hours will pay 25% of resident tuition plus any laboratory or course fees. Eligible dependent children who register for one 1 or more credit hours in UA Online will pay 25% of the UA Online per-unit fee.

https://public.azregents.edu/Policy%20Manual/6-902-Qualified%20Tuition%20Reduction%20Program.pdf

My tuition amount is higher than what it usually is or what I expected. What could be causing this?

You may have been reclassified as a non-resident. You can check your residency classification by contacting the UA Residency Classification team.

UA Residency Classification Phone: (520) 621-3636
​Website: http://registrar.arizona.edu/residency/residenc.htm

I am taking courses at two Arizona universities during the same semester/session. Can I use QTR at both universities?

I am taking courses at two Arizona universities during the same semester/session. Can I use QTR at both universities?

Yes, if you are enrolled in courses at the University of Arizona (UA), Arizona State University (ASU), or Northern Arizona University (NAU), you can receive the QTR benefit at each university simultaneously.  In order to apply for QTR at two different universities, you will need to complete the application process twice in UAccess by applying first for one university and then for the other. QTR applications for courses taken at NAU or ASU must be sent directly to those institutions for processing.

Eligibility

Who is eligible to use the QTR?

Qualified Tuition Reduction eligibility is extended to administrative, professional, faculty, and classified staff employees who are employed at .50 FTE and whose employment is expected to last 6 months or more; employees of affiliated units of the university; officially retired employees; spouses and dependent children of eligible employees.

Is QTR available for employees who are seeking either graduate or undergraduate degrees?

Yes, QTR is available for both graduate and undergraduate degrees. QTR for graduate-level degree programs is considered taxable income. Please review the taxation process.

http://www.fso.arizona.edu/tax-services/sch-comp-exp/scholarship

How do I determine if my dependent child is a qualifying child and a qualifying relative?

Guidance is available at www.irs.gov in Publication 501: Exemptions, Standard Deduction, and Filing Information. See the section on "Exemptions for Dependents." 

Important: If your child is age 24 or older, there are income limits on how much the child can earn and still qualify as a dependent. (The amount is $4,050 per calendar year for 2016; check the QTR application will identify future adjustments.) This means children age 24 and older may not be eligible for QTR in their last semester or session. If the child secures a job after graduation, all income earned for the remainder of the calendar year is applied to the income limit. Consequently, an end-of-year audit may reveal that the child has retroactively become ineligible for QTR, and you may be required to reimburse the value of the QTR benefit the following year.

I'm a student working at the University. Do I qualify for the QTR?

No. QTR eligibility is extended only to administrative, professional, faculty, and classified staff employees who are employed at an FTE of .50 or greater and whose employment is expected to continue 6 months or more.

https://public.azregents.edu/Policy%20Manual/6-902-Qualified%20Tuition%20Reduction%20Program.pdf

Are domestic partners eligible for tuition reduction?

Yes, the University of Arizona offers a Domestic Partner Tuition Program (DPTP) to qualified University employees who have domestic partners. This benefit may only be used at the UA.

Application Process

How do I apply for the QTR benefit?

Complete the online application in UAccess Employee each semester/session. After logging in, select the Benefits tile, then select Education Assistance Plan(QTR), then choose EAP / QTR Application Form.

When can I submit the online QTR application?

Applications can be submitted online up to 3 months prior to the beginning of the semester for which the tuition reduction is requested. A submitted online application does not guarantee continuation of this benefit if the employee's status changes prior to the first day of the semester.

When is the deadline for submitting the online QTR application?

The deadline for the fall and spring semesters is the 35th day of the semester for which the tuition will be applied. The deadline for summer sessions is the last day for refunds for each session for which the tuition will be applied. The online application will not be available after the semester's deadline.

Do I need to submit an online QTR application every semester?

Yes, you must submit a separate online application for each fall and spring semester. Only one application is required for all summer sessions.

If I'm attending classes at NAU or ASU, what process do I need to follow to apply for QTR?

Complete the online QTR application in UAccess Employee. When the online application is approved, there will be a prompt to print a confirmation. The printed confirmation must be turned in at the university where classes will be attended. It is your responsibility to submit your approved application confirmation to the university (ASU or NAU) you are attending. Check with that university's service center for waiver processing requirement and deadlines.

ASU: Student Accounts Office
Tel: (480) 965-6341
Fax: (480) 965-9242

NAU: Office of Student Financial Aid
Tel: (928) 523-4951
Fax: (928) 523-1551

Can I submit a QTR application before the student has registered for classes?

Yes, as long as the student has been accepted to attend the university.

Application Approval

Why is my application "pending"?

An application will be in a "pending" status if a dependent has a different last name and supporting documentation verifying the relationship of that dependent has not previously been submitted to Human Resources. Once documentation is submitted to and approved by Human Resources, the application status will be changed to "approved".

Why was my application "declined"?

An application will be declined if:

▶   You (employee/retiree) did not meet the eligibility requirements for QTR.
▶   Responses to dependent eligibility questions did not qualify the dependent as eligible (either as a qualifying child or a qualifying relative).

If you have questions about why your application was declined, contact HR Solutions at (520) 621-3660.

Can I verify the eligibility status of my application once it has been submitted?

Yes, you can verify the status of your QTR application in UAccess Employee. After logging in, select Main Menu > Self Service > Educational Assistance Plan > EAP Application Review. Once your eligibility is approved, it is sent to the Bursar's Office for processing. Once processed, the student will be able to see the QTR applied in his/her student account in UAccess Student.

Is my QTR application subject to audit?

Yes, random audits are conducted every semester. If you are audited, you will be required to submit documentation supporting your application.

QTR for Graduate Courses

I am QTR eligible and have been awarded a Graduate Tuition Scholarship (GTS). Can I use it and the QTR?

Yes. The GTS may offset any portion of the base tuition that the QTR does not cover. The GTS award will apply after the QTR goes into effect.

Can I use my Graduate Assistant (GA) benefits and QTR?

No. GAs who are entitled to tuition benefits through QTR must choose between the two benefit options.

Graduate-Level Educational Assistance Plan

What is the Educational Assistance Plan?

The Arizona Board of Regents' Educational Assistance Plan policy states that graduate level tuition is considered exempt from taxation up to a maximum of $5,250 per tax year if used for the employee. Tuition amounts over the $5,250 amount will be taxed.

Does the $5,250 EAP go towards fees such as recreation fees or program fees?

The EAP applies only toward tuition. A list of fees that are not covered by QTR is on the Bursar's website.
http://www.bursar.arizona.edu/students/qtr

My spouse and/or dependent is taking graduate-level courses and I did not receive the Educational Assistance Plan (EAP) exempt amount of $5,250. Why not?

Spouses and dependents of employees are not eligible for EAP, therefore, tuition reduction on graduate-level courses taken by an employee’s spouse or dependent children will be fully taxed.

How does my employer tax me on my QTR amount over the $5,250 exempt amount?

The tuition amount over the $5,250 EAP amount, as permitted, will be divided up and taxed over 6 pay periods. Summer QTR will be taxed over 4 pay periods. The divided tuition amount will be added to your taxable gross and you will be taxed using the tax selections you currently have set up. Depending on the taxable amount, this can affect your net pay (what you bring home).

Taxation of the QTR Benefit

Is the value of the QTR taxable?

Employees are not taxed on undergraduate tuition; under IRS regulations, graduate tuition  remission is taxable. The full value of the QTR is considered taxable income for dependents or spouses of the UA employee. The taxes withheld from the employee’s paycheck will be increased to cover the taxes resulting from the value of the QTR. This is usually done shortly after the semester starts.

QTR benefits to UA affiliates are also taxable

What is the tax rate for the QTR benefit?

There isn't a specific tax rate used for the QTR; it is taxed according to your income tax bracket. The amount deducted from your paycheck will depend upon your gross pay, your QTR amount, and your current tax withholdings.

When will the taxation start?

Taxation starts the pay period after the last day a full tuition refund is allowed.

Bursar's Website: http://www.bursar.arizona.edu/students/dates

Why am I being taxed on my tuition when I use the QTR benefit?

The Internal Revenue Service considers the QTR for graduate enrollment a taxable benefit for employees.

Will I be taxed on my domestic partner's graduate-level QTR amount?

No, the graduate-level domestic partner tuition amount will be awarded to your domestic partner as if he or she received a scholarship through the Bursar's Office. Questions regarding this process should be directed to the Bursar's Office.

Bursar’s Office Phone Number: (520) 621-3232

Will I receive a 1099 at the end of the year for my QTR amount?

If you are taxed through payroll, you will not receive a 1099 at the end of the year. Your full QTR amount will be included on your taxable gross on your W-2 form.

Where can I get an idea of the amount that will be deducted from my paycheck so that I can prepare for it?

There are several useful websites that may help you determine the amount that will be deducted from your paycheck.

Paycheck City: www.paycheckcity.com
IRS Withholding Calculator: http://www.irs.gov/individuals/article/0,,id=96196,00.html

I am an affiliate and I am using the QTR benefit. How will I be taxed?

You will receive a 1099 form at the end of the year stating the tax liability. The QTR amount is fully taxable.

Can I remove or cancel the QTR amount if I cannot afford the taxation?

You cannot stop the taxation unless you have the QTR withdrawn.

Can I change my tax withholding so that I receive more on my paycheck and pay the liability when I file my taxes for the year?

You may change your tax withholding rate; however, you are still liable for the taxes.

To change your tax withholdings, log into UAccess Employee and follow the Self Service Menu to > Payroll and Compensation > W-4 Information or A-4 Information.

Is there a separate box on the W-2 form that shows the QTR amount that I used?

The QTR amount for graduate tuition will be added to your taxable gross. The QTR amount will not be located in a separate box. You will see the QTR amount added to your taxable gross in boxes one, three, five, and sixteen on the W-2 form.

Why did I receive a 1098T with the full QTR amount if I was already taxed on this amount through payroll?

Questions regarding 1098T will need to be referred to the Bursar's Office. You may contact them by phone or review their website.

Bursar's Office Phone: (520) 621-3232
Website: http://www.bursar.arizona.edu/

Where can I obtain my QTR notice? Will it be mailed to me?

Your QTR notice is located in UAccess Employee. Click on Main Menu > Payroll and Compensation > Qualified Tuition Reduction.

What information will the QTR notice include?

The QTR notice will include your QTR amounts per semester/session, how many pay periods the taxation will affect and the amount that will be added to your taxable gross per paycheck.

What should I do if I do not receive a notice?

If you are the student, your QTR amount might be under the $5,250.00 EAP amount, in which case you would not be taxed. You will not receive a QTR notice if your QTR amount is not being taxed through payroll.

What happened to my prior year’s notice?

In updating the letters with the correct FICA tax rates for the new year, the QTR notice for prior years were deleted. If you need specific amounts, please contact the Financial Services Office.

Customer Service: (520) 621-9097


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