My job is willing to pay for my graduate degree in civil engineering but they need to know what kind of law there is for tuition reimbursement. Like how they can show that they helped me on their taxes and then deduct it on their end.
I've been searching and all I found are tax laws for employees.
Anyone know how this works if you're a business owner?
Thanks.
The employer can set up an educational assistance program. It would allow the company to pay for up to $5250 of tuition, fees, books, equipment and supplies per year per employee. The company can deduct the cost and the employee does not have to declare the income. Any payment in excess of $5250 is treated as compensation and is taxable to the employee and deductible by the employer.
Here is some information on how a plan should work:
The employer must have a separate written plan; The plan must be for the exclusive benefit of employees; The plan must be for the purpose of providing employees with educational assistance; The plan must not discriminate in favor of highly compensated employees, or their dependents; No more than 5% of the amount paid or incurred by the employer for educational assistance during the year may be provided to a class of individuals who are shareholders or owners (or their spouses or dependents), each of whom (on any date of the year) owns more than 5% of the stock or of the capital or profit interest in the employer; There must be reasonable notification of the availability of the program provided eligible employees; and There must be satisfaction of certain reporting requirements; and Employees qualifying for exclusion of educational benefits from taxable income are prohibited from taking a deduction or credit for the amount of assistance received.
Try publication 15B.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.