UNIVERSITY OF PITTSBURGH \ FORM INSTRUCTION GUIDE FORM TITLE: TAX CALCULATION FOR DEPENDENT EDUCATIONAL BENEFIT FOR OTHER EDUCATIONAL INSTITUTIONS NUMBER: FORM 0035 PROCEDURE: 07-11-01 TO BE COMPLETED BY FACULTY RECORDS OFFICE (NOTE: Only the Faculty Records Office processes FORM 0035.) Enter the following information where indicated: 1. Name of Employee/Faculty Member (Last, First, Middle Initial) 2. Social Security Number of Employee/Faculty Member 3. Name of Dependent (Last, First, Middle Initial) 4. Check to indicate scholarship type: Faculty Staff Term Calculation of Education Benefit Amount 5. Calculate the Value of the education benefit by multiplying the credits by the tuition rate. From this amount subtract the whole number of credits multiplied by $5.00 per credit. Enter this figure on Line 1. This amount will be added to the gross earnings on paycheck stub labelled "SCH VALU." Calculation of Tax Liability 6. Calculated tax liability: a. For highly compensated employees only, calculate the Federal, State, local and Social Security Tax liability by multiplying the dollar amount on Line 1 by .3363. Round the result to the nearest whole dollar amount and enter the result on the Federal Income Tax Line. b. For non-highly compensated employees only, calculate the State, local and Social Security Tax liability by multiplying the dollar amount on Line 1 by .05975. Round the result to the nearest whole dollar amount and enter the result on the Federal Income Tax Line. 7. 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 will be deducted from gross earnings on paycheck stub labelled "SCH CERT." Processing Information 8. Initials of Human Resources/Faculty Records preparer required. 9. Enter date prepared by Human Resources/Faculty Records. TO BE COMPLETED BY PAYROLL DEPARTMENT 10. Social Security Number of Staff or Faculty Member. 11. Copy the dollar amount value of the scholarship from Line 1. 12. Copy the dollar amount of the Scholarship Certificate (scholarship deduction) from line 2. 13. Record the (Hash) total of the above dollar amounts copied from lines 1 and 2. 14. Determine and enter the Employee Pay Period End Date (Format: MM/DD/YY) 15. Determine the deduction Start Date. (Format: MM/DD/YY) 16. Determine the deduction End Date. (Format: MM/DD/YY) Processing Information 17. Initials of Payroll Department processor required. 18. Enter date processed by Payroll Department. Distribution Forward original (white copy) to Payroll Department. Issue yellow copy to student. Faculty Records retains and files pink copy.