The SCAP program changed so that they credit your ASU financials account at the start of every semester so you don’t pay out of pocket, but the IRS code never changed. Even when you paid out of pocket and Starbucks reimbursed you on your paycheck, you still had to pay taxes if you exceeded the $5250 yearly limit.

It’s also important to remember that SCAP still gives you a 42% scholarship so only the remaining 58% counts toward the reimbursement limit, assuming you don’t receive any other grants or scholarships.

I take 4-5 classes a semester and 1-2 classes in the summer and have never exceeded $5250 in reimbursement because of the 42% scholarship and pell grants.

This is for all the partners that are on the ASU scholarship. I want y’all to understand what is happening. They changed the system so that Starbucks is paying 100% of your tuition up front. It sounds great but the government has a law limiting how much your employer can put towards your tuition that is tax free ($5250/year). Anything beyond that is taxed as if it is YOUR income and YOU get taxed for it.

This means, for every $1000 of yearly tuition past that point ($5250), your paycheck will be reduced by roughly $346 (depending on state taxes). This affect takes place at the end of every semester. If your paycheck is not big enough to cover the tax, you will receive $0 and the next paycheck will be taxed, and so on until you've paid off your taxes.

EXAMPLE (Illinois):

Spring Semester Cost: $8660

Tax free: $5250

Remainder: $3410

Paycheck Reduction for Spring: $1,179.86

Fall Semester Cost: $8630

NO TAX FREE (already used up this calendar year in spring)

Remainder: $8630

Paycheck Reduction for Fall: $2,985.98

**Total Paycheck Reduction per Year: $4,165.84**

If you work in any of these states: currently Alabama, Indiana, New Jersey and Pennsylvania. 100% of the tuition is taxable by the state government, so you don’t get the first $5250 tax free in the eyes of the state government.

For me as a full time student taking summer courses, this meant that when I work the minimum 20 hr/wk, I would make $0/week for 31 weeks each year. Meaning, I would work 20 hours a week all year and not receive a penny for over half the year.

For reference, I’ve talked with the ASU financial aid office, the Starbucks Partner Resource office, and my SM. They all confirmed what I've posted.

Know what you sign up for before you sign up.

NOTE: This is tax. So even if you leave SBUX for another job right after the semester starts and SBUX pays the bill, you will still be taxed the full amount.