UNIVERSITY OF PITTSBURGH \ FORM INSTRUCTION GUIDE FORM TITLE: TAX CALCULATION FOR EMPLOYEE/SPOUSE GRADUATE EDUCATIONAL BENEFIT NUMBER: FORM 0035-I PROCEDURE: 07-11-01 TO BE COMPLETED BY HUMAN RESOURCES OR FACULTY RECORDS OFFICE Enter the following information where indicated: 1. Name of Employee/Faculty Member (Last, First, Middle Initial) 2. Check to indicate scholarship type: Faculty Staff Faculty Spouse (check both) Staff Spouse (check both) 3. Name of Spouse if applicable (Last, First, Middle Initial) 4. Academic Term of the scholarship 5. Percent of Effort verified by Employee Record (Format: 100, 040) Calculation of Credits and Tuition Charges 6. Invoice Credits - Post the number of credits from the invoice. If credits are not posted due to First Professional Status, refer to Tuition Rate Table to find appropriate credit value using the tuition amount applicable to the School/Major Code. Calculation of Eligible Credits: 7. a. Enter in decimal form the percent of effort determined in step 3 above (e.g. 1.00, 0.40). b. Multiply Maximum Eligible Credit Amount by the Percent of Effort to determine number of Eligible Credits. Example: Maximum Eligible Credits Percent of Effort Eligible Credits 6 x 0.40 2.4 8. Compare the Invoiced Credits to the resulting Eligible Credits. The minimum value determines the number to be entered in the area labeled Issued Credits. This is the number of credits the scholarship is to be issued for. Example: Invoiced Credits Eligible Credits Issued Credits (6 x 0.40) 1 2.4 1 Calculation of Tuition Charges: 9. Enter the per credit Tuition Rate from the Tuition Rate Table using the applicable School/Major Code. 10. Multiply the Tuition Rate by the number of Issued Credits to determine the amount of issued tuition. Enter that dollar amount on the Tuition Charges Line. Calculation of Employee Payments 11. Truncated Integer Credits - Enter whole numbers only. When the calculated eligible credits result in a decimal, drop the numbers to the right of the decimal point. (Example: 2.4 = 2, 3.7 = 3) Do not round. Multiply the whole number of credits by $5.00 per credit to determine employee payment. 12. Enter the dollar amount of employee payment on the Employee Payments Line. (Payment values are limited to either $5, $10, $15, $20, or $30.) Calculation of Tax Liability 13. Calculate the value of the scholarship by subtracting the Employee Payments from the Tuition Charges. Enter the resulting dollar amount on Line 1. 14. Calculate the Federal and Social Security Tax liability by multiplying the dollar amount on Line 1 by .2765. Round the result to the nearest whole dollar amount and enter the result on the Federal Income Tax Line. 15. Calculate the Scholarship Certificate Amount by subtracting the sum of the Federal and FICA tax liability from the Value of the Scholarship on Line 1, and enter the result on Line 2. This amount is entered on the Employee/Spouse Graduate Scholarship Certificate. Processing Information 16. Initials of Human Resources/Faculty Records preparer required. 17. Enter date prepared by Human Resources/Faculty Records. TO BE COMPLETED BY PAYROLL DEPARTMENT 18. Social Security Number of Staff or Faculty Member. 19. Copy the dollar amount value of the scholarship from Line 1. 20. Copy the dollar amount of the Scholarship Certificate (scholarship deduction) from line 2. 21. Record the (Hash) total of the above dollar amounts copied from lines 1 and 2. 22. Determine and enter the Employee Pay Period End Date (Format: MM/DD/YY) 23. Determine the deduction Start Date. (Format: MM/DD/YY) 24. Determine the deduction End Date. (Format: MM/DD/YY) Processing Information 25. Initials of Payroll Department processor required. 26. Enter date processed by Payroll Department. Distribution Forward original (white copy) to Payroll Department. Issue yellow copy to student. Faculty Records retain and file pink copy.