Hi everyone!Just curious if anyone else has gone through this but I have a loan forgiveness through my school for Upmc Shadyside that their school costed $32,054 for two years and I only had to pay $10,000 and $18,923 was forgiven as long as I work my two years at upmc as a full time nurse. When I started work, every two weeks, $131 is taken out of my pay check until two years or $6,812 of taxes have been paid.......Will I see this money back ever??? Or did I really just pay almost 17,000 and make myself committed to UPMC for two years??
Dec 21, '12
by llg, BSN, MSN, PhD Guide
You'll have to talk with the official people who run the program at your hospital ... but it is VERY possible that you do taxes on the amount of your school expenses being paid by your employer. The general rule is that any compensation you receive from your employer is considered "taxable income" unless it meets a very narrow set of requirements. That usually includes educational loan payback programs.
They are paying you almost $15,000 in the form of the a school loan. That $15,000 is "extra compensation" for the work you do over the next 2 years -- and the government wants the taxes from that income.
Assuming that it is going to be considered as taxable income by the government, you might want to talk with a tax accountant to see if you can reduce your tax obligation by doing something like income averaging to spread that "income" out over a few more years. Depending on your income history and near future, you might be able to reduce the tax burden a bit.
Last edit by llg on Dec 21, '12