[Gsc-hca-offcampus] Negative Impact of MIT's Reasonable Compensation Policies

[Todd Harris]

MIT Married Grads-

Do you get paid stipend money that you must pay back to MIT as a  
tuition because of MIT's accounting policies for students who receive  
outside fellowships?

Does this increased tax liability have a negative financial impact on  
you or your family's income?

Please read below to learn more about this issue and about efforts by  
the GSC to rectify these policies. You can assist us by emailing  
information about your situations to gsc-hca-taxation-chair at mit.edu .  
You can also visit the website http://web.mit.edu/gsc/www/committees/ 
hca/taxation to learn more.



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The negative impact of 'Reasonable Compensation' policies at MIT on  
students with families

The 'reasonable compensation for RAs and TAs' policy at MIT requires  
that any RA or TA money that covers a tuition shortfall, be paid to  
the student at an institute-mandated ratio of 36.5% stipend 63.5%  
tuition. The student is then responsible for paying back tuition from  
the stipend. If a student has a fellowship or outside funding source  
that pays more stipend vs. tuition than MIT's established ratio, than  
the student receives tuition payments in the form of stipend and he  
or she must report more income than is actually taken home. To offset  
the negative impact this might have on a student's tax liability, MIT  
subsidizes the excess stipend payment to account for 15% federal and  
5.3% MA taxes.

While MIT makes a good faith effort to rectify the negative impact of  
this accounting policy on a student's tax liability, there is a  
hidden negative impact on students supporting a family that has not  
been addressed. In particular, this falsely inflated salary may  
reduce the eligibility of a student and their family for the Earned  
Income Tax Credit and government-subsidized programs such as: WIC  
(Women, Infants, and Children), MassHealth, Fuel Assistance,  
Transitional Assistance  (Food Stamps) and others. The yearly fiscal  
impact of the policy on a student may be several thousands of dollars  
depending on family size, income, health etc.\

To address this issue the Housing and Community Affairs committee of  
the GSC has established an informational website (http://web.mit.edu/ 
gsc/www/committees/hca/taxation/) We are encouraging individuals who  
are impacted by the policy to visit the website to learn more and to  
contact the HCA Task Force on taxation (gsc-hca-taxation- 
chair at mit.edu) about their situation. Our goal is to assist students  
in meeting eligibility requirements and to obtain compensation for  
students who have suffered financial losses. We are currently working  
with the new Dean of Graduate Students, Steven Lerman, to address  
these issues. Information about how these policies have affected you  
will help us to advocate our cause.

Sincerely,

Todd Harris
Chair of the HCA Task Force on Taxation


Todd J. Harris
Massachusetts Institute of Technology | 77 Massachusetts Ave. E19-582  
| Cambridge, MA 02139
Harvard-MIT Division of Health Sciences and Technology
Laboratory for Multiscale Regenerative Technologies
web: lmrt.mit.edu
telephone: 617.959.1303
mail to: tjharris at mit.edu