WEST LAFAYETTE – Dozens of Purdue University employees, among hundreds taking up the university’s offer for free or discounted tuition toward online degrees at the newly rebranded Purdue Global, recently received a surprise in the mail.

Corrected W-2 forms came with an explanation: You might owe income taxes on that free tuition.

In a letter sent March 22, Kathleen Thomason, the university’s comptroller, wrote that Purdue’s “tax experts recently concluded that beginning in the 2018 tax year, certain Purdue Global education benefits must be treated as imputed income, subject to all applicable taxes.”

Tim Doty, Purdue spokesman, said 33 of the 432 employees who took part in the tuition breaks at Purdue Global – either for themselves or their families – were affected by the decision on taxable compensation.

“Because we didn’t catch this up front, Purdue is going to cover the tax expenses for those 33 employees this year, and we will change our application forms to make clear the circumstances in which employees may be taxes for the benefit,” Doty said.

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