Graduate Student Stipends and Philadelphia Wage Tax
In 2019, the City of Philadelphia issued a memo indicating that Philadelphia universities should withhold Wage Tax on 50 percent of the stipend amount it pays any graduate student who renders services to the university. For example, if a graduate student receives an annual stipend of $15,000, the university should withhold and remit Wage Tax on $7,500.
Effective May 2022, graduate students will see this reduction in applicable wage tax directly in their pay checks. The Philadelphia Wage Tax will only be applied to 50 percent of the stipend for the pay. Additionally, corrections will be made for all prior applicable wages in 2022. The result of the correction will be an increase in net pay. Steps 1-5 below detail the petition process for refunds applicable to 2019-2021.
- Complete the Wage Tax Refund Petition Form for each applicable year including signing the employee certification section. The employer section of the form will be completed by the Payroll Office: 2019 [PDF]; 2020 [PDF]; 2021 [PDF].
- Email the Wage Tax Refund Petition Form to the Drexel University Payroll Department (email@example.com) with the subject line: Graduate Student Stipend Reduction.
- The Payroll Department will review the form for correctness, confirm the amount of the refund request; sign the form, and submit the petition to the City of Philadelphia for the refund.
- The Payroll Department will send an email to the requestor detailing the amount of the refund request and the date the refund was submitted to the City of Philadelphia.
- The City of Philadelphia mails refund checks directly to the employee's home address.
The deadlines for Refund Petitions are:
- 2019: Feb. 28, 2023
- 2020: Feb. 28, 2024
- 2021: Feb. 28, 2025