Payroll Taxes

Employers are required by law to withhold employment taxes from their employees. Consult with a licensed tax professional for any personal tax-related questions, we are NOT allowed to give tax advice.

Mandatory Tax Withholding

Includes:

Income tax withholding based on information provided by employees on Form W-4. This tax is paid exclusively by employees.
FICA, Social Security and Medicare taxes, is paid equally by employers and employees. The Social Security portion is referred to as Old Age, Survivors, and Disability Insurance, or OASDI, and provides benefits to retirees, spouses, and former spouses, dependent children in some cases, and disabled individuals under retirement age. The Medicare portion allows those age 65 and older (and certain other individuals) to qualify for Part A Medicare coverage with no additional cost, plus coverage through Parts B, C, and D for an additional premium.
FUTA, which is a federal unemployment tax, paid exclusively by employers.
State unemployment tax paid by employers, although a few states require some employee contributions.

Exceptions:

The Student FICA exception of IRS Section 3121 (b)(10), exempts services performed for a college or university by a “student who is enrolled and regularly attending classes” at the institution. A student employee of Marymount University is eligible for this exemption if the following conditions are met:

The student employee must be enrolled and attending classes on at a least half time basis, either in an undergraduate or graduate program of Marymount University, during the semester in which the work is being performed.

The student employee must be classified as a student employee as designated by the Human Resources Department.

Their primary role at Marymount University is that of a student; i.e. Regular Full and Part Time Staff & Faculty are not eligible for the exemption.

W-2s

Marymount University is required by the Internal Revenue Service (IRS) to provide all employees with a W-2 Form, Wage, and Tax Statements for each calendar year to be used in completing the employees’ annual tax returns.

The W-2 Form details the employee’s compensation (earnings) and tax withholding amounts for the year from their paycheck.

According to the Federal Treasury Regulations 31.6051-1, the W-2 form must be furnished, meaning properly addressed and postmarked, by January 31st and the 1042 Form (for Foreign National employees) by March 15.

Access your W-2 in Workday under Benefits & Pay > My Tax Documents.

One Time Payments (OTP) and Bonus Payments

When an employee receives a large OTP or Bonus payment, the withholding tax may be larger than anticipated thus reducing the net amount received. Employees have the option to revise their Form W-4 in Workday to reduce the tax payment. Revisions must be submitted at least one (1) week before payday. After payday the employee may revise their Form W-4 to the prior election.

Out of State Employee Tax

Employees with a primary work location outside Virginia may have their state taxes withheld from their paychecks.  Marymount University (MU) will review, but has no legal obligation to withhold or remit income tax of another state. It is the employee’s responsibility to ensure they follow any out-of-state tax requirements where approval for Remote Work from outside the State of Virginia is authorized.

The primary work location is the address an employee works at for three (3) or more days each week.  If this address is not on MU Main Campus, Ballston, or 4040 Fairfax Drive, a Request Flexible Work Arrangement form in Workday must be completed every July 1st.  Refer to the Remote Work and Flexible Schedules Policy.  Once your remote work request form is approved, your alternate work address will be entered in Workday.

It’s important Marymount has accurate information regarding where their employees are working.  This affects not only taxes but Workers Compensation, unemployment claims, benefits, leave plans, Internal Revenue Service (IRS), and state and local government restrictions.

Currently Marymount University is set up to process state tax withholding from the following states.  The employee needs to complete a state tax form and submit it to payroll@marymount.edu to be exempt from Virginia income tax withholding.

Tuition Remission Benefit

Undergraduate Courses

The IRS does not require taxation of tuition remission benefits for undergraduate courses.

Graduate Courses

Tuition remission benefits for employees for graduate level courses are only taxed if the amount remitted exceeds $5,250.00 in a calendar year. If the remission does exceed the $5,250 maximum, the employee will be taxed on the amount above the maximum threshold,

The value of the remission benefit for spouses and dependent children enrolled in graduate courses is taxable regardless of the amount.  

Employee’s Paycheck

The amount to be taxed will be added to the employee’s paycheck over set pay periods and taxes will then be deducted.  In Fall and Spring semesters, Payroll will apply and split up the taxable amount across seven (7) paychecks to ease the burden on each paycheck. They are also reported on the W-2 form at year-end.

Each semester Payroll receives a report indicating the total dollar amount of tuition remission applied to the employee’s student record for graduate-level education. If the amount received by an employee exceeds the annual excludable amount of $5,250, the excess must be added to the employee’s taxable wages during the semester in which they are taking the class.

The increase in taxable wages also increases the taxes withheld and reduces net pay. All employees are encouraged to track their tuition remission benefit for the year and plan accordingly. To estimate the increase in taxes withheld, review the IRS Publication Tax Table 15-T.

Other Fringe Benefits

Cell Phone and Data Plan

Employees whose job duties include the frequent need of a cell phone or data device may receive a taxable allowance to cover business-related costs. Paid 24 pay periods per year at $25.00 per paycheck.