Tax cuts come in 2000 for student employees

After July 2000, students employed by Pennsylvania’s public schools will not have to pay Federal Insurance Contribution Act taxes. The tax cut was announced yesterday at Penn State Harrisburg by Gov. Tom Ridge’s administration.

Penn State employs more than 7,000 students who will now save a total of about $3.3 million a year due to the elimination of FICA taxes. Penn State will save an additional $3.3 million annually because it will no longer pay its share of the FICA tax.

The elimination of the tax will provide students "with an increase in disposable income at a time in their lives when it is very much needed," Rodney Erickson, graduate school dean, said in a prepared statement.

The exemption also will make Penn State more competitive in recruiting and maintaining students and will allow the university to give more financial aid to students, Erickson said.

— by Nikki Velisaris