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William Ellis, CPA
William Ellis, CPA, CPA
Category: Tax
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Experience:  Over 15 years of experience in public accounting
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I want to implement a qualified tuition reimbursement plan

Resolved Question:

I want to implement a qualified tuition reimbursement plan for my small business. I was wondering what the tax implications would be if I provide tuition above the $5,250 annual limit per IRS section 127 and would this apply to a university outside of the United States?
Submitted: 5 years ago.
Category: Tax
Expert:  William Ellis, CPA replied 5 years ago.
Exceeding the amount could have a couple of different consequences. The first is that the excess would be included in the employee's income without any associated taxes withheld. Or, the IRS could deny the entire plan, putting the entire amount in their income while denying you the expense beyond $25 for a gift.

I am not sure if the payment has to go towards a domestic school.

Hope this helps,

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