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Taxation of Employee Fringe Benefits

February 07, 2017 • Linda Diaz • Log In to Post Comments

Is the graduate or doctorate course taxable under employee fringe benefits above $5,250 for employees if manager, and VP sign employee fee waiver form that the course is job-related? 

 


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Linda,

Employees can exclude only up to $5,250 per year for education assistance provided under a qualified educational assistance program of the employer.  Assistance received in excess of $5,250 is taxable to the employee.  Note that if the benefits are not provided under a qualified educational assistance program of the employer, then the entire amount of assistance may be taxable.

Mike,

Thank you for the comment. One last question, can the employee of a qualified educational assistance program be able to deduct the excess over the $5250 as a qualified tuition deduction?

Linda,

The employee would only be able to deduct it if he paid it directly to the educational institution.  Even if the employer pays the tuition above $5,250 and the amount over that threshold is inclulded in the employee's income, he still would not be entitled to a tuition deduction or credit.

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