Reduced Room and Board for Student Employees

Scope

This policy applies to student-employees who are offered free or reduced-rate housing or board, in whole or in part, as compensation for work in Indiana University campus housing facilities at IU Bloomington, IUPUI, IU South Bend and IU Southeast. Employees of Indiana University housing/residence life and financial aid office staff must be aware of this policy and are responsible for its implementation.

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Policy Statement

Compensation for students hired as residence assistants (RAs) must be managed consistently across all IU campuses with regard to treatment under IRS and federal financial aid guidelines.

Tax Policy - Under Internal Revenue Code Section 119, reduced room and board for employees may be considered excludible from income in situations where the benefit is provided as a convenience to the employer and when it is provided on the employer's premises. In addition, acceptance of the employer-provided lodging must be required as a condition of employment. If residency is not required to perform duties, please consult the Tax office for further interpretation.

Financial Aid Policy – The value of housing or food provided as a component of a student-employee’s compensation is not considered as a resource in the student-employee’s financial aid package. Actual wages are included as financial aid only if the student-employee is compensated under the Federal Work-Study program.

Communication Policy - Housing contracts signed by student-employees eligible for room/board reductions will contain specific wording regarding the value of the room and board, the amount of the applicable reduction, and the reason the student-employee qualifies for this “living allowance” as a part of the contract.

The housing/residence life office will send annual statements to student-employees on contract to show the value of the “living allowance” and to confirm if it is excludable from income according to a cited Internal Revenue Code Section. Finally, housing/residence life will advise the student-employees that both taxed and untaxed income must be reported on the Free Application for Federal Student Aid (FAFSA) when that tax year is the basis for the FAFSA.

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Reason for Policy

This policy was adopted to ensure that the four Indiana University campuses that offer housing are uniformly managing compensation for student-employees and treating reduced room and board for tax and financial aid reporting.

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Procedures

Annually, the University Director of Financial Aid will notify the lead administrators for housing/residence life offices on the campuses that provide housing, to ensure they are aware of the policy and expectations for communicating with student-employees.

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Additional Contacts

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