AGAINST "ZERO-DOLLAR PAYCHECKS" AND TAXED TUITION AND FEE WAIVERS FOR GRADUATE STUDENT WORKERS

WHEREAS, the section of the federal income tax code, IRC 117, that allows the exemption from taxation of tuition and fee waivers for graduate student workers in certain classifications; and

WHEREAS, another section of the federal income tax code, IRC 127, allows for the exemption from taxation of graduate tuition and fee waivers only up to $5,250; and

WHEREAS, if the exemption of IRC 127 is not renewed, it would dramatically reduce the take-home pay of many graduate student workers in the United States, and all university employees not protected by IRC 117; and

WHEREAS, the language in IRC 117 exempts from taxation tuition and fee waivers "in the case of the education of an individual who is a graduate student at an educational organization described in section 170(b)(1)(A)(ii) and who is engaged in teaching or research activities for such organization"; and

WHEREAS, the University of Illinois has not extended this tax exemption for tuition and fee waivers for graduate assistants (GAs) and pre-professional graduate assistants (PGAs); and

WHEREAS, the University of Illinois, as a result of this policy interpretation, since Spring 2011 has withheld an income tax of up to 36 percent of the value of tuition and fee waivers above $5,250, causing reduced paychecks each semester for more than 200 graduate student workers employed across the University of Illinois system; and

WHEREAS, the University's tax withholding policy caused at least 32 student workers at the Urbana-Champaign and Chicago campuses to receive "zero-dollar ($0) paychecks" for two to three months each semester of the 2011–2012 academic year, and the majority of GAs and PGAs suffered drastic reductions in take-home pay; and

WHEREAS, a disproportionate number of those GA and PGA employees affected by this policy interpretation are low-income men and women of color, and employees of international origin who cannot work off campus are more severely impacted because of visa restrictions; and

WHEREAS, if other Universities interpret the language of IRC 117 in the manner that has occurred in Illinois, this high tax burden has the potential to jeopardize the ability of graduate student workers in all states to successfully complete their degrees:

RESOLVED, that the American Federation of Teachers will support legislation that renews IRC 127 and also extends the protections afforded under IRC 117 to all graduate student workers; and

RESOLVED, that the AFT will prioritize informing higher education members and affiliates about this issue, through the AFT's website and other communications and at the annual higher education conference, and will work to determine the extent to which other members and graduate student locals are negatively affected by IRC 117.