University Procedure 6720 (Clothing – Purchase, Issuance, and Taxability for Employees) provides guidance on the purchase, classification, issuance, and tax treatment of clothing provided to employees, including student workers, using University funds or through vendor promotional agreements.

As part of this procedure, departments are required to maintain a Clothing Distribution Log.

Quarterly Submission Deadlines

Please submit completed Clothing Distribution Logs to the Tax Office by the 10th day of the month following the end of each quarter:

• April 10 – Q1 (January–March)
• July 10 – Q2 (April–June)
• October 10 – Q3 (July–September)

Special Q4 Deadline

To ensure accurate calendar-year tax reporting:

• Q4 logs (October–December) are due by December 10.
• Clothing distributions between December 10 and December 31 should be minimized.
• If distributions occur after December 10, departments must submit an updated log as soon as possible, but no later than January 2, as payroll adjustments may be required.

Please work with your department to ensure compliance with University Procedure 6720.

Roles and Responsibility

University departments giving gifts to individuals are responsible for the proper reporting to the Payroll and Tax Department. Information regarding gifts is submitted via the Gift/Prize Documentation Form.

Administration

Gifts to Employees from Stockton University

Any cash or cash equivalents (e.g., gift certificates, gift cards) are required to be included in gross income regardless of the dollar amount. Gift certificates or gift cards are considered to be "cash equivalents" and are treated the same as gifts of cash per the Internal Revenue Service's "de minimis fringe benefits-Gift Certificates" regulation. The department must complete and have the employee sign the Gift/Prize Documentation Form. It should be submitted to the Payroll and Tax Department, which will include them as taxable items on the employee's Form W-2 along with a deduction of the applicable FICA amount. 

Gifts to Non-Employees

If Stockton University gives a gift to an individual who is not a Stockton employee and the gift is not in lieu of payment for services the individual has provided to the University, Stockton does not have reporting requirements to the IRS since gross income generally does not include the value of property acquired by a gift (I.R.C. § 102).

Approval

If you are unclear as to whether specific acts are covered by this policy or if you are unsure of the reporting, please e-mail the Tax Department at tax@stockton.edu.

 Employer Provided Housing

The value of employer-provided housing is generally treated as income - meaning that the subsidized portion of the housing is taxable to the employee who receives the benefit - under the Internal Revenue Code (the "Code"). There are certain narrow circumstances in which the value of the subsidized portion of the employer-provided housing is appropriately excludable from income under the Code. Under the Code and applicable Treasury Regulations, an exclusion is warranted when (1) lodging is provided under circumstances that satisfy the "nontaxable lodging" provisions of Section 119(a) of the Code and Section 1.119-1 of the Treasury Regulations; or (2) lodging is provided under circumstances that satisfy the "qualified campus lodging" provisions in Section 119(d) of the Code.

Non-Taxable Lodging

Definition

Under Section 119(a) of the Code and Section 1.119-1 of the Treasury Regulations, the subsidized portion of the housing provided by the University is excludable from an employee's gross income if the following three criteria are met:

1. Housing must be furnished for the convenience of the University,
2. The housing must be on the University campus, and
3. The employee must be required to live in University-owned housing as a condition of employment.

The three-part test creates a narrow exception, and the Internal Revenue Service has taken a conservative approach to the first and third criteria (relating to the "convenience of the employer" and "condition of employment"). Both the Tax Department and the Office of General Counsel must determine that these three criteria have been met prior to making such representations.

Substantiation

Except in unusual circumstances, the Payroll Department will not exclude the value of University-subsidized housing under the "nontaxable lodging" provision in the Code and implement regulations unless the following substantiation requirements are satisfied:

• The residence must be on the University's campus. 
• The written agreement must contain language indicating specifically that (i) the on-campus residence is provided for the convenience of Stockton University and (ii) the employee must accept housing on campus as condition of employment for job-related reasons that are explained in the written agreement. 
• For certain positions when required in the employment agreement the employee must keep a log, notebook, or other form of contemporaneous written record showing that the residence is used for the discharge of job-related obligations: (i) the date and time; (ii) the nature of the meeting or function held at home or the telephone call received at home; (iii) the duration of the meeting, function, or call; (iv) in the case of a meeting or function, the number of people involved and the name of each person (if easily recordable); and (v) any other information supporting the job-related nature of the meeting, funtion, or call. The log should be retained and available for inspection for seven years.

Qualified Campus Lodging

Under Section 119(d) of the Code, which is specific to educational institutions, an employee avoids tax liability on the value of housing subsidized by the University if the annual rent he or she pays for University-owned housing is at least five percent of the appraised value of the residence he or she occupies. If the annual rent is less than five percent of the appraised value, then the difference must be reported to the IRS as taxable income. The University will use the current assessed value set forth in the records of the local municipality's tax office as the appraised value for each University-owned property.

An employee is eligible for the "qualified campus lodging" exclusion if the housing satisfies two criteria:

• It is located on, or in the proximity of, either of the University's campuses. The Tax Department will deem the "proximity" requirement to be satisfied if the employee certifies that the housing is located no more than five minutes by automobile from the University campus, which is the employee's principal place of employment.
• It is furnished to the employee and the employee's family for use as a residence. The Tax Department will view this criterion to be satisfied if the employment agreement or other pertinent documentation recites that housing is furnished to the employee and family for use as a residence.

General Implementing Rules

Except in unusual circumstances, the term of a lease for University-owned housing should be coextensive with the term of employment for a specific University job and should terminate no later than sixty days following cessation of that job.

Contact the University Tax Department if you have any questions about this policy or if you would like more information.

Meal Reimbursement for Overtime and Official Business Meals

Generally, meal expenses that do not involve an overnight stay are not reimbursable. The University may allow reimbursement if documentation supporting the reimbursement clearly establishes that the individual takes the meal during overtime work periods and for official business reasons. To be eligible for reimbursement, the University must consider such meals essential to its mission and a business necessity.

Overtime Meals

An overtime meal allowance is allowed when overtime worked is:

• Essential to the Institution's mission,
• Permitted under University policy,
• Approved by appropriate authorized approver, and
• In excess of the employee's normal, schedule work hours.

Stockton University’s policy regarding overtime meal allowance is to provide employees a meal reimbursement, if they work beyond the normal work day and perform at least 3 additional consecutive hours of work that are not otherwise compensated for at premium rates. The maximum rates are as follows: breakfast $7, lunch $10, and dinner $15. Please visit the Accounts Payable site for more information on Overtime Meals. 

An overtime meal allowance is considered taxable wages and must be submitted to the Payroll Department for processing. 

Requests for meal reimbursements should be submitted to the Payroll Department (Payroll@stockton.edu) on a Meal Reimbursement Request. The payment will be processed through Payroll and will be included with the bi-weekly salary payment. This change is effective immediately. Hotel reimbursements will continue to be reported to the Accounts Payable Department via Chrome River. 

Stockton University offers the Commuter Tax$ave Program, which allows eligible employees to pay for qualified mass transit and commuter parking expenses with pre-tax dollars.

Employees may exclude qualified transportation benefits from their taxable wages up to the monthly limits established annually by the IRS for:

• Commuter highway vehicle (vanpool) transportation and transit passes.
• Qualified parking.

Any benefits that exceed the applicable IRS monthly limit, less any amount paid by the employee, will be included in the employee's taxable wages.

For additional information go to, https://www.stockton.edu/human-resources/additional-benefits.htmll  and  https://www.nj.gov/treasury/pensions/pension-active-other.shtml

Stockton University provides eligible employees and certain eligible family members with undergraduate tuition waiver benefits in accordance with University Procedures 6161 and 6164.

For more information, please visit our Human Resources' webpage 

Tax Treatment

Under Internal Revenue Code (IRC) §117(d), qualified undergraduate tuition waivers are generally not taxable.

The tuition waiver  applies totuition only. Fees, books, supplies, room and board, and other non-qualified educational expenses are not covered by the tax exclusion and remain the responsibility of the student.

Questions regarding eligibility should be directed to the Office of Human Resources. Questions regarding the tax treatment of tuition benefits may be directed to the Tax  Department.

Stockton University offers eligible employees graduate tuition assistance and tuition waiver benefits to support professional development and continuing education.

Tax Treatment

Graduate tuition benefits may be excluded from taxable income underInternal Revenue Code (IRC) §127 (Educational Assistance Programs) up to the annual IRS tax-free limit.

Graduate tuition assistance or tuition waiver that exceeds the applicable IRS annual exclusion limit is generally considered taxable compensation and will be included in the employee's taxable wages and reported on Form W-2 unless another exclusion under the Internal Revenue Code applies.

The Tax Compliance Office reviews graduate tuition benefits to determine the taxable portion, if any, and applicable payroll taxes will be withheld through the employee's paycheck.

For more information, please visit our Human Resources' webpage 

PROCEDURE 6161, Tuition Waiver and Reimbursement for Employees 

Tuition Waiver FAQ

Why are there tax withholdings on my tuition waiver?

All graduate tuition and fee waivers are taxable unless, exempt under the Internal Revenue Service (IRS) Code. In compliance with IRS Code §127, $5,250 per calendar year (January to December) in tuition and service fee waivers associated with graduate assistantship (GA) appointments are excluded from taxable income. If the amount of the tuition and service fee waiver exceeds $5,250, the excess (the amount above $5,250) is deemed taxable income under IRS Code and taxed accordingly.

Is this a change in University policy?

No. Under federal tax law, a university employee who receives a graduate school tuition waiver in excess of $5,250 in a calendar year must treat the excess amount as additional taxable income (unless exempt as noted below). As a result, the University is required to withhold tax on the excess amount of the tuition waiver for graduate service assistants (GSAs) and report this amount on the W-2. However, tuition waivers for certain service assistantships may be tax exempt under IRS Code §132 and Treasury Regulation 162(a), which allows education benefits from employers to be tax exempt for certain courses of study.