Tax change could mean less money for some grad students

Jamie VanGeest

Instead of receiving a tax refund, some University students are getting a bill from the state of Minnesota.

Many graduate students must pay the government hundreds of dollars because of a change in the language on property tax forms. The change does not apply to income tax forms.

In the past, on the state property tax refund form, students had to include scholarships, grants and fellowships in their total income.

This year the language for items that must be included for income now specifically states that any tuition waivers must be included, said Sara Kempner, the president of the Council of Graduate Students.

Graduate students receive tuition waivers if they are a teaching assistant or a research assistant at the University. Also, students from states other than Minnesota receive out-of-state tuition waivers to make up the tuition difference with students who get in-state tuition.

Now tuition waivers will be included with nontaxable income, potentially making what students receive back for their property tax refund much less.

Beyond getting back less money, the state is contacting graduate students and asking them to pay back any extra money they received in the past for not including tuition waivers.

“All of these students filled it out in good faith,” said Kempner, who is also a child development graduate student.

Karen Buhr, president of the Graduate and Professional Student Assembly, said most students didn’t understand they needed to include tuition waivers on their tax form.

This change doesn’t apply to federal or state income taxes, only the property tax refund form, Kempner said.

So far 60 graduate students have contacted the Council of Graduate Students saying the state is either auditing them or ordering them to pay back extra money they received in 2003 and 2004, she said.

The state’s response to the language change is that it has always intended to have tuition waivers as a part of the nontaxable income, the language on the form just didn’t specifically state it until this year, she said.

Mike Betty of Liberty Tax Service in Crystal said there isn’t a lot students can do to change that they owe the state money from previous years.

This is just probably one way the state is saving money, he said.

Kempner said she hasn’t been contacted by the state about owing money, but she predicted the change will cut in half the amount of money she gets from her property tax refund.

This development is bad for graduate students because many of them depend on this money.

The Council of Graduate Students is talking to a lawyer at the Law School and state senators to see if they can have the law changed.

Kempner also said many students had their taxes filled out by professionals who didn’t know to include the tuition waivers for income.